You need to make sure the timing marks are spot on with the timing belt tight. I cringe to think that you've already started and driven the car twice while being unsure of your alignment.

Second, ANY time you take the head off an engine to replace/rebuild anything, replace the thermostat. ANY time you do anything to give you access to the timing belt [such as replacing it], replace the water pump. It's cheap insurance.

I'm guessing that the timing was done correctly the first time, but the thermostat didn't open properly to vent air from the cooling system, which would have your gauge read somewhat normal, and the heater and engine seem very hot.

Also sounds like when you moved the timing belt one tooth, you retarded the camshaft, and that's why power seems to be very lacking, because ignition timing is run directly off of crank timing.