I did remove the upper timing chain. and I can rock them back and forth easily, so they don't seem to be binding. Before installing the chain I did pre load the adjusters as stated on a few online articles.
Well before I stripped the engine to remove the sludge I used vag com to test the solenoids and tested ok, I have applied voltage to the solenoids as well and they expand and contract as normal, I have stripped and cleaned them as well including the housing they bolt onto and cleaned the fine mesh filter.
The motor as I said has been completely redone, and has not started as yet due to the slipping issue on the adjusters, only been rotated by hand so I presume there are quit a lot of components that have not been lubricated by the oil pressure, however all components were lubricated by hand to ensure no parts stick or grind on each other.
However I did find the following today, not sure if it could be the cause as I have not re assembled yet to test, but what I found was that the tensioner bolt the screws in on the side of the engine that pushes against the one guide was not bled as per posts on the web. It was able to be compressed by hand. After compressing the tensioner bolt in oil a few times until all the air bubbles came out it became much harder to compress by hand, much harder. So I am not sure if there wasn't enough pressure on the timing chain causing this issue.
So to recap, I rechecked all the timing marks, including the brass links on the timing chain and the arrows on the adjusters are corresponding to the notches on the housing unit. I have cleaned the camshaft adjusters as they look like they came out of the box and cleaned the solenoids and there housing unit.
All the timing marks are correct and there is no slack on the timing chain, except where I must install the tensioner bolt. I have also pre loaded the camshaft adjuster as noted on a few online manuals.