Rep Power: 0

I'm working on a buddy's '93 dx 1.5 that has kinda been driven hard and put away wet. previous owner said they did the timing in the last 40K miles, but from other evidence (green tranny fluid, jello in the brake fluid) I didn't have a whole lotta faith. So when I did the valve check/adj, I looked at the belt.

I'm new to Hondas and drive belts, knowing only Stuttgart and Ford brutal timing chains, and it just seems "slack" on both sides, firewall and front side of the engine. I can even almost slip the belt off the teeth off the cam sprocket. the front edge of the belt appears to have been rubbing against something (the crank keeper?) and there's a bunch of reddish dust in the housing. Pixie dust?

If this were a chain I would have replaced it yesterday. Could anyone give me a suggestion whether I should just do a new timing belt (I'm already waiting for a new steering rack, since that was leaking holy water all over creation) or leave what might be well enough alone?

Thanks,
Shmoo