Baseline is right, spark, fuel, air.

Chances are the intake hose from the amm to the turbo is, ummm, hosed.

Lots of heat and oil from camshaft seal leaks goes right to the junction of the compressor bypass hose and rots it quickly.

Harmonic balancer appears to be shot, impossible to time the engine. If you try you'll just screw it up...you'll have to remove the upper and lower timing covers just to see where the crank timing mark is and then paint a mark on the harmonic balancer outside ring at 0 degrees...and then you get to watch it move while you try to time the engine. So replace the balancer. If there is oil on the water pump casting, chances are the cam seal is leaking, you might as well replace it (and the intermediate shaft and main front seal) but it's not 'necessary' as far as your diagnosis/getting it to run.

The distributor is on the rear of the engine..on an 87 turbo it's quite likely the connector for the distributor hall sensor is toasted/disintegrating. It's a $5 part and takes a few minutes to replace. The distributor must be off the car...take the cap and rotor off first. While the distributor is off, clean off the alum mounting surface on the distributor (and the head) and replace the O-rings (two) that are visible on the distributor. Replace the rotor and cap if more than three years or 60K miles. Consider replacing the plug wires if they're cracked and stiff..they should also be cable tied to the clamp holders attached to the cam cover bolts. You still won't be able to time the engine with a bad harmonic balancer.

Remove and clean the throttle body assembly...check the idle switch for continuity at close throttle...the switch should audibly 'click' when you move the throttle open at the slightest move. If it doesn't, some ham handed ignoramus has adjusted the idle with the butterfly stop screw and it won't idle.

Try starting it with the plug to the amm disconnected...if it starts and idles and runs poorly but better than so far, you probably have a bad air leak or a bad amm. Rule out the air leaks.