2002 A4, 1.8T AWM engine.
Had a CEL shortly after Timing belt change 3 months ago. Checked it was P1269 cooling system malfunction. Figured the mech didn't bleed it right thought it might work itself out. Kept driving.
It got colder maybe 40ish, one week noticed car temp gage not responding at all. And turned on the heat for the first time nothing.
Took it to the mechanic he said it was an electronic head? And pointed to the fan control module, didn't make sense. Drove it home, 15-20 minute drive, letting idle noticed top hose wasn't hot felt like no circulation.
Shut it off few hours later went to pull in the garage and it wouldn't start. Barely limped it in. Pulled codes P0117 and P0010.
Changed Cam position sensor for P0010 code.
Started idling but and running pretty well, checked oil and I got foam under cap and all up the dipstick.
Cleared codes rescanned P0010 remains but the P0117 clears??WTH
Clear again, Next day run it to get to temp and it is low drove 1 1/2 miles to gas station and back.
Clear and P1296 which I had already bought the coolant temp sensor so changed that out. Run codes again P1296 clears P0010 remains.
Removed some of the breather tubes getting at the Coolant sensor and they are gunked up. Afraid I am on the way to the sludge problem if not already there.
Should I feel air at the crankcase breather (running it with the intake side off). I feel air at the valve cover, but nothing at the crankcase breather.
Lots of gunk in the crankcase breather wiped what I could, pulled the tube going back to the turbo it was nearly blocked soaked in carb cleaner but still feels restricted ran a snake down most of it can't make the last bend but forcing a lot of crud out. first watered down oil then crud.
The moisture is now visible under the coil cap, on the dipstick and it was all through the tubes heading back to the intake and the thing right above the diverter valve was full of water, did not appear to be coolant mixture.
I have three avenues here.

When the coolant was not circulating, I overheated the engine, and I blew a head gasket. No oil in the water side. Did not fill with any coolant during this time. change head gasket. Engine is running pretty good after I changed the Cam Pos Sensor.
Could the starting of the sludge have caused a blockage resulting in condensation so the water was not caused by head gasket?
Start self desludging process.

Change the oil, throw some eng cleaner in there and check pressure. Am I milking this way too much?

My thermostat is messed up and will fail the cooling system again? I wasted my time changing the temp sensor, and I need to change thermostat, and crankcase breather tube.
But what is still causing the P0010? I f a flush does work.

 

Drained the oil out must only be condensation. Dipstick and the topside breather tubes. I think it built up from the coolant system not working properly.
And the one tube almost blocked completely so it wasn't getting any heat to keep it from condensing. The water and foam on the dipstick< I am thinking may be it isn't sealed right and letting some moisture in. Ran some oil down the tube to force the foam down.
Oil was black black after only 2,000 miles.
I still think there is somewhat of a cooling problem temp was barely odd the C after 10 minutes idling and a trip around the neighborhood for 15 minutes. Figure it should at least get to the first mark.
I have heat in the car now but that seems weak too.
I think the thermostat may be going. I'll have them pull the crankcase breather tube and flush it out, while down there.
Next oil change will pull the valve cover and clean that up, more sludge prevention.