When you remove the cover, the upper cam "bearings" are part of the cover. I don't understand why pulling the cover off would free up the engine. The "bearings" are not very tight normally, it's a steel cam spinning in a plain aluminum alloy bore (no actual bearings are present), this is not an excellent bearing combination so it is fairly loose to allow a generous oil film, and the load is pretty light.
If you loosened the tappets a lot, valves frozen (rusted?) in their guides could have been jamming the engine. If the cam is way out of time, yes valves can hit the pistons and again by loosening the tappets you could have eliminated that.
Cam timing is pretty simple, I'm not sure of the 500 engine though. There will be some marking on the end of the cam, possibly a line. That line may want to be aligned with the cylinder block top with the crank at 1-4 T mark. The cam mark and alignment used may be different on a 500, check a service manual. (note that if you're told to have the #1 intake valve open or whatever... nope - it doesn't matter what cam rotation you're on: a full crank rotation will turn the cam exactly half a turn and have the mark in the same orientation again)