Definitely sounds too slow. These engines are quite speedy for an old-tech diesel if everything is in proper condition and tune. Especially the higher output intercooled edition like yours. Power should start to come on strong by around 2000 rpm and stay strong up past 4000 before it starts to taper off.
When was most recent fuel filter change? And air filter?
Any signs of excess smoke when it starts to lose power? And does the power recover quickly when you get back down to low RPM after it loses steam at high RPM? Or does it seem breathless for another few seconds, want to idle extra slow until it bounces back, etc?
Is this an issue that has always been present with this car (how long have you had it?) or did it develop more recently after the car had previously been running stronger? If the latter, did it occur suddenly or gradually get worse over time?
Loss of power at higher engine speeds is textbook classic fuel starvation. It could be textbook airflow restriction too (from clogged air filter or exhaust) but normally that would be combined with big clouds of of black smoke which you didn't describe seeing. So fuel would be the first guess.
There are a few other possibilities too:
- mis-adjusted injection pump fueling rates
- fuel system restriction upstream of the fuel filter (at tank pickup for example)
- leaking or disconnected boost enrichment signal hose from intake manifold to top of inj pump
- problems with EGR system (if equipped) causing either EGR leakage under heavy load, or restricted intake manifold from EGR oil/carbon buildup
- incorrect injection or cam timing, possibly involved with a stuck cold start device or improperly connected high altitude compensation system
- some others
But these are all less likely than a simple plugged fuel filter, so pursue that first. Even if the filter is fairly recent (or believed to be), worth changing it again, as they're cheap, and even one tank of contaminated fuel can plug a filter. If confirming no fuel supply restriction doesn't get it more lively, then there are next steps to check from there.
One other recommendation though -- experience (mine and others'!) shows that, if possible, it would be good to wait on the cam belt and injection pump work until AFTER you first finish diagnosing and solving the low power issue. Introducing more variables always makes troubleshooting harder, and if you do the belt/timing work, then you will be changing multiple factors at once, and it could become hard to know what cause is leading to what effect. E.g. -- not saying this would happen, but it could
-- if cam or IP timing ended up not being right on the mark after the belt work, then that might mean there are TWO independent factors causing the engine to run incorrectly, and making organized diagnostic progress in that situation could become very challenging.
Usually much more effective to change one variable at a time in pursuit of one targeted problem, then move on to the next problem once that first one is solved. The one scenario in which you might want to disregard this advice is if you are concerned that the timing belts might be so aged that they are at risk of snapping anytime -- in that case, yes, best to change them ASAP (using correct tools/procedures) and worry about the power concern later.