I have an 03 A4. When I turn the AC on to any setting, even at 96 degrees outside, it blows HOT air. The only way I can get it to blow cold is to put it on LO and manually control the fan. Has this happened to anyone else?

No matter the temp outside, hot air unless on LO.

What could this be a malfunction of? What can I check?

 

By process of elimination, getting cold air on at least one setting shows that your compressor is ok and you have an adequate freon charge. If I had to guess I'd fault the climate control module. Only way to tell for sure of course is for a fault scan.