There's no real reason to set the engine at TDC before removing the head, it's not an overhead cam setup so there's no cam gear to align.
It's a good idea though to back off the rocker adjusting screws all the way as this will avoid uneven pressure on the rocker shaft when undoing its 3 retaining bolts/nuts.
If you want to set it to TDC anyway it's a little bit hard (but not impossible) with the timing cover and head on.
If you've got a camera take pictures as you go, it can save a lot of swearing and head scratching later.:D
I'd do it this way.
1/. disconnect battery
2/. remove viscous fan, belts etc to get good access to front of engine.
3/. It's probably a good idea to remove the radiator/intercooler assembly as it's a good idea to flush out/rod the radiator before re assembly (don't lose the two rubber locating grommets that hold/locate the frame into the front cross member or the two 'o' rings on the oil cooler pipes).
3/. remove the glow plugs to make engine easy to manually turn over with a socket on the harmonic balancer retaining bolt.
4/. remove the rocker cover
5/. turn the engine over by hand watching the valves on no 1 cylinder noting the opening of the inlet valve (2nd valve from the front). When this valve closes the piston is at the bottom of the bore. A half a turn of the crankshaft will put the piston at TDC. You may be able to feel the piston down the injector or glow plug hole with a long screwdriver or piece of wire (I use a long plastic knitting needle) to determine TDC. If you want to be super accurate (ie. when setting timing belt) you can 'feel' with a screwdriver blade up the threaded hole in the bottom of the bell housing for the notch in the flywheel. The ring gear teeth can be 'levered' with the end of the screwdriver blade to get it spot on. When this notch is in line with the centre of the hole (on the compression stroke) you are exactly at TDC. There's a special tool for this which locks the flywheel when replacing the timing belt.
DO NOT rotate the crankshaft anti clockwise (backwards). :)
It's a lot easier to do this with the head off when you can see the pistons.:D
Downloading this and having a good read before starting is a good idea. :D:D
http://www.google.com.au/url'sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&u act=8&ved=0CB0QFjAA&url=http%3A%2F%2Fwww.landrover web.com%2FPdf-files%2F300Tdi_Overhaul_Manual-Land-Rover.pdf&ei=iQ_pVOHmMdLd8AXDkYCoAw&usg=AFQjCNG_uQ ZM0vz2KB_6M8defFg3jMFfKw&bvm=bv.86475890,d.dGc
Deano :)

