Yes the head must be on to set the timing. Figure 39 in section 8-2 is correct and is the same as fIgure 11 in section 8-1. Ditto in the Max Ellery Manual as per attached pic. I always use a timing whistle similar to this MG 8016MRG Mr.Gasket TDC Whistle | eBay to find TDC. Like this:
But you can use a balloon too e.g.
or a compression and vacuum gauge
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