(Novice) Standard PS fluid in 84 5000S

["G. Benedikt Rochow" <rochow@segosf.hlo.dec.com>]

[my main question: how bad is standard PS fluid having been used
in the steering/brake-assist system?]


Hello, I'm new to the list (I'll introduce myself later).

I just bought an '84 5000S (non-turbo, non-Q) quite cheaply;

among other things, it sounds like it has some sort of
exhaust leak, and it feels like it is close to the engine - everything 
in the engine compartment is rather too hot, including fenders 
and the hood.
I'm just listing this just in case it has anything to do with
my main question: 
The power steering/brake system has been leaking fluid for a while
apparently; the previous owner had a 3/4-empty gallon jug of 
regular NAPA power steering fluid in the trunk, and now I find
Audis use something (entirely?) different...
-after the seller overfilled the reservoir in preparation for my test
drive, the fluid was bubbling out the top and otherwise 
leaking like a faucet.
-hoses coming from the reservoir look 'wet' close to the reservoir  
-while it sounds to this point like it might just be the reservoir
 leaking, I do not feel any steering assist.
-it does seem to brake adequately.
-the upper-middle-of-the-instrument-cluster brake warning light
 (with 3 beeps and the flashing triangle) comes on after
 about 10 secs of idling (or 20 seconds of driving, if I drive off
 immediately) after starting.

Does the warning light indicate anything in particular? 
Would the wrong fluid do any permanent damage? 
(What exactly is the right fluid?) My (gas-station) mechanic
says normal PS fluid is OK, how wrong is he?

For low-$$ fixing, if the steering rack is the leak point,
could one disconnect it and keep the brake-assist?
(Would I notice it if the brake-assist is not working?
I do notice the lack of steering-assist, but it's
still easy enough to steer - or was this a weak power
steering to start with, which is still working?)

Thank you.

G. Benedikt Rochow