Originally Posted by markinva
interesting. here's some internet forum speculation I've read on the audi forums. these engines only had 4.0 qt capacities, only used dino oil, and had no electric oil pump or cooling for the turbos after the engine gets shut off. All in stark contrast to the bmw setup (7 qts, oil cools turbo after shutdown (I think?), and speciific syn oil).
The VW 1.8T calls for VW 502 oil, which is a tough standard to meet and is always synthetic. Favorite oils are Mobil 1 0W-40 and Castrol Syntec 0W-30 – just like here in BMW land.
The turbos are water cooled, and there is flow with the engine shutdown.
That said, the sump is small and some owners/dealers did try to run dino. However it appears that even with the proper synthetic the engines will sludge (actually the problem is not "sludge" in the traditional sense) if the oil is left in too long or if the crankcase ventilation system is not working correctly.
The most interesting part of this mess is that it is a North American problem. Subtle differences in operating environment, fuel standards and who knows what else can have big impacts on maintenance requirements, occasionally to the surprise of the engineers. And this example shows how it can take time for these issues to surface.