A quick update - went to Storm Developments today with a plan to change the camchain tensioner as the engine is increasingly sounding like a bag of spanners (more than the normal TFSI lump sound). Andy took a second to listen to my engine and said that the head is way too loud than normal and it sounds like chronic oil starvation issue has caused premature cam wear and that my idea of replacing the cam chain tensioner is moot at this point
We discussed options of what can be done... Taking the overall cost of fixing bits that are obvious now and then having the risk of dealing with other bits that will likely need fixing later, like suspected shagged bottom end, it made more sense to assume the worse and just get a replacement low mileage engine instead.
I'm still reeling from the shock of having to drop a good few grand to properly fix this, but I see no other way out other than to bite the bullet and deal with the kick in the groin that this is going to be and move on.
I thought about getting a hybrid turbo in there while I have a chance, but Andy made me see sense and suggested that I look at getting an RS3 instead of chasing more power than Stg2+ from the S3 as it will end up a bottomless money pit
I'm very happy with the current 360bhp/370lbft, so adding two more grand to an already large bill to get s light bump to that is not going to happen at this time. Will definitely replace the stock intercooler though and while the replacement engine is in pieces, anything that can/needs to be replaced, refreshed, cleaned or upgraded at reasonable cost will be done at the same time. I plan on keeping the car for a good while yet, so at least I'll have some peace of mind there after this.
Many people would ignore the loud engine and continue to drive the car as is, but I prefer to keep things working properly, so made my choice and will pay for it. Andy will look at sourcing an engine for me, so hopefully it's not going to take too long to get over this.
Anyway, a sad update, but in the words of a very smart man, "Life is like a box of chocolates... You never know what you're gonna get." Such is life of a car fanatic