Do the #1 cylinder have to be up when setting the timing

Do you mean ignition or valve timing? the ignition timing you cannot adjust it is ecu controlled. the valve timing has to be set by locking the crankshaft using a special locking tool that fits in place of the crankshaft position sensor located in the lower flywheel housing and keeps no.1 cylinder on tdc. and two locking bars bolted over the front of the camshafts to keep them in the correct positions, the camshaft sprockets are not keyed to the camshafts to allow adjustment. you need the special tools to carry out this operation, hope this helps.