In all my years of working on Type 2, 411, 412 and 914 motors for VW Canada, this is a new one to me. However if this was on my bench, this is what i'd be looking at.
1) measure the cam journals to make sure they are in spec. However im quite sure your cam is toast now. but confirm or deny the cam that was involved here is in spec or not.
2) cam line bore. is it proper and straight? if you dont have the tools for this, take it to a machine shop. Or find another block.
Other items
a) picture of the oil pump cover - gear side please
b) to check the cam thrust clearance, with the case half on a stand, install the bearings. drop the cam in, use feeler guages to check the clearance or end play. or slide it back and forth with a dial guage set up to measure the thrust clearance.
c) how do the rest of the cam and crank bearings look?
d) Cam gears. check for proper lash.
some other thoughts.
I dont like playing hide and go seek with these motors. If the cam wasnt ground oversized by accident by webcam, i'd be looking for another block. I would be looking real hard at the oil pump drive and cam gears. always install a double thrust bearing for the cam. So, cam joirnal too big, block twisted, cam gears or low oil pressure. Always mock you motor up first with no cam gears installed. Its a pain in the ass, but well worth it. this way, with the block all torqued up, you can spin both cam and crank, slide them back and forth to make sure everything is in order.
Say, is there any chance you accidentally installed that thrust bearing in the wrong side of the block? I.e. used the other standard bearing and covered the oil gallery hole for that journal? ..... Just sayin"
Cheers
Mike