I would be testing the ignition leads first. If those are ok, move on to a compression test.
If it's a chain issue, and they are known for it, you'd hear a fair bit of noise out of the timing case. I would however, confirm that it is not a chain issue before continuing to drive it. If the chain does fail, you WILL be up for close to the value of the car in repairing/replacing the head. Otherwise, replacing the chains, tensioners, and guides isn't all that epensive. I did a GTI not that long ago, that came in under $2K for the whole job.
'07 Transporter 1.9 TDI
'01 Beetle 2.0
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