I'm pretty sure it is just the flat puck seal/washer under the cam towers. Look's like everything from valve cover down is soaked.
I have it at TDC on #4 that shouldn't matter as long as it goes back that way correct?
Paul
If its the pucks, you'll be removing the cam and cam stands. YOu can retorque the head nuts, put in fresh pucks and o rings and reinstall. TDC on 4 is also TDC on 1, and thats where you want to be.
I'd remove the cam chain tensioner from the back of the block. YOu may need a new gasket. Sometimes the gasket sticks to the tensioner cleanly and you can reuse it. YOu can disassemble it and make sure it is working smoothly, no indentations on the stem where the lock bolt contacts it. THey often hang up that way. THat will assure quiet running as much as possible with old parts.
To your question, you're right. But you are on TDC 1 so you can use the manual instructions as well.