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Darn, I feel really sorry for you.

I also think that a 2nd hand engine would be the cheapest and easiest route to take. Would be a quick swap too.

Just to add, there was a guy on audi-sport.net that had his APY engine fail due to localised heating on the side of a piston causing ring failure and bore scoring. Hopefully this isn't the case with yours.

Somehow the crankcase has become pressurised enough to force the oil out. If the breather system isn't working correctly then usually oil can be forced past engine gaskets and into the induction. High oil comsumption is a symptom. Having said that, oil out of the filler cap means big pressure in the...