That sounds better than the what the OP's doing. I would remove the pump but if the belt's relatively new maybe not.
You should mention how you're keeping the thrust washer in place. Vasoline?
I just put it back where it belongs on the back of the plunger and very gingerly maneuver the assembly back in place. Once in awhile one will fall out on me, but you know it when it does that. Just have to take the assembly back out, fish the washer back out and put it back where it belongs. That smidge of surface tension from a little bit of remaining diesel on the back of the plunger is usually sufficient. I angle the plunger upwards a little as I'm putting the head back on, then as I near the cam plate, lower it and line it up carefully.
Prior to removal of the assembly, I rotate the engine over until I can see the opening on the back of the plunger through the QA opening (QA removed) that lines up with the nub on the cam plate that aligns and drives the thing. This puts the cam plate resting back on the rollers as well instead of extending outwards on the apex of the lobes. Makes it a bit easier to keep things in place and I can see exactly where the plunger needs to line up. Plus, should the cam plate flop forward, I know exactly what position it was in to put it back. Not very fun getting the rollers back in place while the pump is on the car, though... But it can be done. I've been known to insert a clean paper towel (I prefer Scott "Shop Towels") into the front of the pump once the head has been removed and set down, then insert a pair of clean pliers in through the QA opening to hold the shop towel back on the cam plate and keep the cam plate in place, freeing both hands up to deal with the pump head, remove the o ring and install the new one the right way without stretching the bajeezus out of it.
Either that or deegingerkid is hanging around as a very handy extra set of hands for that step of the process and I'll have her grab the pump head and install the o ring while I hold the cam plate in place after I've carefully removed the assembly from the pump. I've done several dozen pumps this way over the last several years now. If I'm opening that pump up, I'm replacing all the seals I can with it still bolted to the car. Case pressure relief valve o rings (tap the collar back flush while you're there), shut off solenoid o rings, top and middle cover seal, triangle plug that threads into the pump head (I have seen a number of them leak now--I made my own socket for it) and of course the pump head o ring itself.
Speaking of the case pressure relief valve, I have had cars that set codes for incorrect timing advance. Run a basic setting 04 and notice that the timing doesn't change AT ALL (should vary between EARLY around 8 degrees BTDC and LATE is about 4 degrees BTDC). 75% of the time replacing the o rings on the case pressure relief valve fixes it. Particularly the bottom one further in the pump. I've had those be flattened out and rock hard, allowing fuel pressure to bypass the valve altogether and just go passed the lower o ring. You'd be amazed at how much better one of these runs once the timing advance is working correctly again and it's such a simple fix usually.
But yeah, using a tacky assembly grease like vasoline isn't a terrible idea so long as it doesn't cause problems as it merges with diesel and goes through the fuel system.
It is unfortunate that the N108 can't be removed with the pump still bolted to the engine, but I rarely see them leak fortunately. Whatever chemistry those green o rings use seems to be a fair bit more durable than the normal buna-n stuff.
I did a demonstration on removing the pump head at TDIFest 2012 in Michigan, it was on film too, but I don't think that the film ever got posted. It was also on an early 1Z pump, which has a smaller QA opening and is a little bit more difficult to deal with than the ALH pumps.
Some day I should make another film outlining how I do pump seals and post it... Try to edit it to be short and to the point (unlike some of my posts).