With the cover on I've never seen the chain jump on a 4.0. I have heard of them jumping in Chev's, have seen them jump in old Dodge V-8's (especially the old ones with the plastic sprockets), I have seen the chain in the 4.0 so loose it will grind into the inside of the cover on the 4.0 (makes a lot of racket) and even grind all the way through the cover so the oil leaks out. Check out the inside of your cover for grind marks, if there aren't any, it's doubtful it's worn (or stretched) enough to be an issue.
TDC is basically when the number one cylinder is all the way up on the compression stroke. Both (intake and exhaust, number 1) valves are all the way closed and the timing marks line up. And the two dot's line up on the timing chain sprocket and the cam sprocket and are on the same side (closest to each other). And the distributor rotor is pointing near number one on the cap (it won't be exact just near).
Number one top, compression, turn the motor over until the cylinder starts to make pressure at the number one spark plug hole, I usually use a compression gage. I use a gage because the cylinder can build a little pressure (sometimes) in the exhaust stroke and it may fool you if you just use your thumb.
Align the timing marks, always turning to the right (clockwise) last (facing the motor from the front). So you take up the slack in the timing chain.
The two dots on the crankshaft sprocket and the cam sprocket should be close. The two valve rockers for cylinder number one should be loose enough to wiggle them by hand a little and at an even height (hopefully all the way up).
This is kind of a rough way to check and not exact, but will let you know if you are close or not. I've been checking TDC like this for 45 years, don't know if it is right, do know it works. There are ways to get much more exact, but usually not necessary. It's easier to do than to explain, so if I've got any of it wrong anyplace, hopefully, somebody will jump in and correct me.
Should take around three hours to change out a timing chain and sprockets, without serious complications (broken bolt etc.). Might as well check the harmonic balancer (they do screw up) and replace the seal.
