Hello everyone!

I have a '99 VW Passat and love my car. However, the car was running really sluggish, with white smoke coming out the tailpipe. I noticed the yellow "check" engine light was on, so I hooked up the diagnostic tool, and got back a p1338 code. As you may already know, this means the camshaft sensor. I took it to the stealership and they replaced the Camshaft sensor. However, they said the timing was "off" on the motor, and there was nothing they can do because of the buildup of sludge.
I then towed the car to my garage and opened the gasket cover to try to clean this mess.(See photos Attached)

1)Is there a way i can fix/clean this without a rebuild?
2)Code p1338 is still coming on. Why?
3)How do i fix the timing?


Any suggestions would really help!

Thanks!

 

iit has probably jumped the chain timing and wore out the tenshener
probably dew to a bad oil pump
major work needed posable turbo damage too