Ihave a 1997 A8 4.2 with 120K Miles, and I have just experienced the exact same problem - no reverse other than on a flat, smooth surface at idle. I pulled a forum note from edmunds.com where someone responded that "the most common reason is a piston blowing out in the very back of the trans", requiring a rebuild. Any further progress from anybody? - Thx.

 

Just wanted to update on this....I ended up having the tranny rebuilt. It cost $4100. Ouch. But at least I have reverse!