I did not build the motor. But it had a new chain and tensioner in it when sent out for rebuild. No tensioner now. Even if they recycled the old chain, it should not be this sloppy.
It entirely depends on the quality level chain set they used. I can tell you from personal experience, if you do not spend at or around 100 bucks for a timing set, you're probably not getting a good one. You need a billet set to assure minimal chain stretch. If they put a garden variety chain on it, even brand new, it will be stretched in 15 minutes worth of run time. Most people who use those types chain sets never notice it on a light, because they normally just set the timing once and turn it loose. They're not looking for a performance timing curve and will likely never see the variation in timing.
It would also bother me if the engine went in with the tensioner and came out without. They should have replaced new with what was there doing a rebuild. Although the tensioner cannot keep the chain set from retarding due to stretch, it can and will most certainly stop a loose chain from showing variations like you're describing.
One last note. When you go to to the test turning the crankshaft, once you get it up to TDC, you will need to turn the crank BACKWARDS to check chain slop, since you will be turning the crank clockwise bringing it up to TDC.
