And my last suggestion, has a water pump ever been done on the car, they usually need to be done around 80k miles.

 

Audirpm, interesting idea that I'll pass on to him. Jmgrande, the radiator is good, vagcom showed a transient code for the CTS (which has been changed and the code is gone), and the water pump is solid. The G12 coolant is new too.

This is getting good as more people chime in - keep the ideas coming guys!

 

Now I'm scratching my head.

 

Found this, worth a shot.

http://www.ehow.com/how_7683_tell-cars-thermostat.html

 

Check the antifreeze level in the radiator, and another thing, maybe the heater core is bad. Check all hoses for leaks, tears, or bad connections.

Double check the coolant level to make sure it's not pissing out.

 

If you replace the t-stat again - you could throw it (both?) in a pot of water and then heat it up on the stove to see if it opens.
The flaps not opening fully seems possible too, although I've never dealt with those on this car.

 

I would change the thermostat again, they are under 20 bucks and easy to change.

 

Only real good way to check. Also it can't be the radiator since the thermostat doesn't open until the coolant is warm enough and sends it to the radiator.

The reason he has heat with the car stationary is that the thermostat is stuck open, or opens prematurely but there isn't enough airflow through the radiator to cool the coolant. As soon as he drives though, the airflow cools the coolant and since the thermostat isn't regulating flow to the radiator, the coolant is overcooled.

 

Bump, but just checked my records, i get a discount at audi and paid $23

 

To address the latest points:

Heater core is good, and has been cleared in both directions by blowing it out forward and reverse. Half the coolant lines on the car are new in the last year and a half, and visual inspection of the entire underhood portion of the cooling system reveals no splits, rips, tears, holes, bad connections, or even brittle hoses. Coolant, as noted above, is new out of the bottle.

When they installed the new t-stat, they did not check it in water first (should've done that), and when this one is removed, they're going to do so to see what happens with it. The part is cheap enough, but on a 2.8 it's far from a quick change - it's a good 3-4 hour job as the car has to be put into service position and half the front of the engine must be torn off to change it. Not a difficult job in any way, really, but it's somewhat time consuming and he was hoping to not have to go through it again so quickly. Such is life. He's planning to do so this weekend.