On Twisted6's suggestion, I pulled off the timing cover to take a look at the end of the cam to make sure it didn't walk on the gear. It looks like it is fine, but now I'm really confused:

I stuck a rag in the #1 sparkplug hole and turned the engine over. When the rag was spit out of the hole, the engine was on the compression stroke for #1, correct? This means that the #1 cylinder should be at (or near) the top of its movement and the following valves are ready to be adjusted:
#1 Intake & Exhaust
#2 I
#3 E
#4 I
#5 E
This is what the lifters under the the side cover closest to the front of the engine look like:


To me, this confirms that #1 is set to fire. When I look at the timing marks, though, this is what I see:


When I turn the crank one rotation (until the timing marks are aligned), I think the #6 is on its compression stroke. Which means that that the following valves are ready to be adjusted:
#2 E
#3 I
#4 E
#5 I
#6 IE
Looking at the picture below confirms that #6 is firing I believe:


When I looked at the timing marks though, they are lined up.

At first I was thinking that the cam gear was install 180 degrees out on the cam. How can this happen with a woodruff key?