You've got to get the chain tensioner compressed. Two ways I know that you can do this are either by hand with the timing cover off or with a big zip tie that you can reach up and cut after you get the cam gear on. First time I did the chain with the head on I used the first method. Easiest of the two, but you still have to get the cover back on, which is easier with the head off. This time I did it the second way, which worked but getting your hand in to snip the zip time ain't easy for a ham fisted American. I suspect there's a tool the factory uses to compress the tensioner while they assemble engines, but I haven't seen a SST for it.
BTW, don't worry about those cracks, both my old and new covers had that same sort of flaky appearance. Like Matt says, just the way they look after casting.
Gaskets are the way to go IMHO, although you'll need some FIPG or RTV between the head gasket and top of the timing cover. A new head gasket has a bead of silicone that seals to the top of the timing cover, which is a one time thing. If you succeed in getting the cover out without disturbing the HG, then a light coat of RTV works great. You will need FIPG for the oil pan, or at least high temp RTV. The red Permatex stuff works fine or Toyota black. I have a tube of Toyota stuff if you want it. If it's even still good, it certainly will be bad by the next time I'd use it.