Diagnostic Test

I have 3 questions:
1. When a mechanic performs a diagnostic on a vehicle to see why it wont start, what is the diagnostic consist of?

2. If the customer choose to have the mechanic do the work, is the price of the diagnostic included in the total of the labor?

3. How do you set the timing on a 98 Dodge Caravan?

I had a machanic replace my water pump and timing belt on my 98 Dodge Caravan. After replacing both, my van still would not start. The machanic did a compression test on the motor and came to a conclusion that my engine was no good. I called another machanic and explain what the first mechanic did.

The second mechanic stated he would need to do a diagnostic test. He put a new battery in (that I purchased), three spark plugs that the first machanic took out. He had me start the van. He came to the conclusion that the first mechanic did not put the timing belt on correctly. He said that I could let the first mechanic do it correctly or he could do it for me, but he would have to take everything apart to get the belt on right. I agreed to let him redo the timing belt. He charged me $75.00 for the diagnostic and the repair to redo the timing belt he is charging $345.00.

I thought that a diagnostic check is putting the vehicle on a machine. What would he have to do to put the timing belt on right. Please help. Thank you.