Hi Shipp
There is definately a problem here that Audi won't admit. My cam chain and tensioner went at 36k. The stealers charged me £830 including parts and VAT. I complained to Audi UK and they agreed to contribute 50% towards the parts, reducing the bill to £530
My advice is get the stealers to do the repair but get all the parts you need from VAGPARTS they are far cheaper than Audi.
My advice would be to change the water pump and the cambelt as all these will be asccessible they should not charge the labour for this just the parts which you can get cheaper from elsewhere, if they do complain to Audi Uk.
These guys really take the [censored] here, you buy an Audi thinking it's a solid car nothing this major should go wrong with it. Stand your ground mate with Audi. Let me know how it goes.
Taj