I found on the consumer reports site that the 96 2.8 quattro has fuel tank grounding problems. That would explain my stereo problems since it's grounded near (but not toooo near :-) the fuel tank ground. Also would explain my erratic fuel guage. If anyone has experience with this.... PLEASE let me know if it's possible to improve the ground of the fuel tank, and therefore, my many problems associated with it. Thanks!

 

extend the ground, find a spot where it can be bolted to, then make sure theres no paint on it. If so, just scratch off the paint, clean it really well and you should solve the problem.

 

Erratic fuel guage:
http://www.audiworld.com/tech/elec77.shtml
http://www.robsaudiworld.com/fuelrepair.htm
Both pretty good links that address two different problems with the fuel guage. Pretty easy to do, I just fixed mine. Good luck!