dude, the diamond is a TIMING MARK..
the DIMPLE NEAR THE BOLT HOLE is the TDC mark..
someone pull an injector and stick wire down the hole..
if you time your engine to the diamond, it will KNOCK when you shift.. ask me how i know..

Bentley Manual

85 Jetta GL Turbodiesel flywheel.
Yes. Please clarify. I had mine aligned as per the Bentley manual for about 100,000 miles.
Yes, Kevin please try and stop the non-informative posts when there is already confusion lol! It makes it more confusing.
I was pretty damn sure the DIESEL flywheels had the diamond timing mark.
Here was my 91 NA. A diamond right by the hole.

Now here is my 210mm gas flywheel, as you can see the dimple is over and to the left of that hole. So I referenced a diesel flywheel and copied marks and notched my own for my TDI application.
I just checked the flywheel on a 1.8 gasser my brother and I pulled out of his cabriolet--it's the exact same as in the one in the picture. This leads me to conclude that:
ROR is correct when he says the diamond on the flywheel in the picture that 8v posted is indeed NOT TDC, but instead a timing mark, meaning that to use that particular GASSER flywheel, you would indeed need to time to the circle, not the diamond, as ROR suggested. However, on all DIESEL flywheels, USE THE DIAMOND AS PER BENTLEY or prepared to be very sad.
Time to the Diamond unless you know for sure you are running a Gasser flywheel.
Also, for what that picture was originally intended. Yes dead center of those two bolt holes is TDC. The pointer in the trans housing is right in the center of those two bolt holes.
when the DIAMOND AND DIMPLE are right in line with each other, they are TDC marks..
when the DIMPLE is 7/16" from the DIAMOND, then its NOT the TDC mark..
see the bentley post, thats a dimple and diamond in line with each other..
those are both in the same relative position, and both TDC marks..
My dimple has diamonds, or is it that my diamond has a dimple? Either way, diesel motor and flywheel so both in line as in the picture. Keep it stock and you don't have this kind of confusion. But no fun either.