smoky 1.8t

[George Nimmer]

I know someone with a '98 VW Passat which has the 150hp 1.8T engine.  I
know this engine was also sold in the A4 and the TT in 150hp, 180hp, and
225hp variants.

The problem with this Passat, is that it has "only" 97k miles on it, but
it produces a *voluminous* amount of blue smoke when it is cold
started.  It stops producing a massive volume of smoke after running for
~30 seconds or so.

Being a turbocharged engine, this clearly sounds like worn piston rings
or valve seats (or both).  This car was purchased new, and had the full
100k extended warranty option purchased with it.  It is still within the
100k extended warranty, however the dealer refuses to repair the
problem, saying that it is very labor intensive, and that it must get a
whole lot worse before they will fix it.

My questions to the 1.8T (vw or audi) owners of the list are:
- Is this amount of smoke normal for a 1.8T with "only" 97k miles on
it?
- Is the dealer right in refusing to repair it even though it is within
the extended warranty?
- Has anyone else had this experience, and what was the response from
the dealer when you asked to have it repaired under warranty?

All comments are appreciated!

Thanks