OP this is very probably it, to check just remove your belly pan and disconnect the rubber hose connecting the hard pipe to the bottom of the intercooler and see how much oil comes out. You could also just remove your throttle body hose but you wouldn't be able to tell as easily as the oil drips down to the low point. If its not dumping oil into your intake then it's probably dumping it into the exhaust. Either way you would need to rebuild your turbo or buy a new one

 

Depends on the head gasket leak. If it just leaks between the oil passage and the cylinder, no oil in the coolant. Still, head gaskets are not bery common issue on either the 1.8 or the 2.8.

 

You guys are jumping to conclusions really fast! I would say that the little puff of smoke could be valve stem seals, especially if it only does it on start up once its been sitting a while. As for the rumble I would try changing all of your spark plugs asap. Look for water or oil on the plugs that can be an indication of head gasket. Also keep an eye out for it smoking white or blue while driving. When I blew a head gasket in my talon it sounded like a subaru from the water fouling out the one plug.

 

You can also drain the oil and see if you have any particulates seperate out

 

UPDATE: After doing some research online and reading your responses I think I found what is wrong. I jacked the car up and look underneath at the exhaust and right where it goes up into the engine it is broke. Putting my hand over the exhaust when the car is running there is like none hardly coming out of the back.

As for the turbo most of what I saw online said that the car would be smoking a lot if the turbo was blown but it is not. Just a puff of blue of the car is sitting for more than a day or 2. The culprit to this seams to be the valve stem seals. Which looks expensive and hard to do yourself and having hardly any money I'm not to happy about it.

Although I could be wrong but this seems to be whats wrong, any thoughts on difficulty on doing these 2 things or price to have a shop do them?

 

Well if you have the proper tools, go ahead. The seals themselves are easy to replace. It is getting to the seals that is the trick.

 

UPDATE: Can this be welded? or what do I need to do to fix it?

 

You need a new flex pipe. A muffler shop can weld in a generic one....going to be around $350.

 

Wow, talk about over priced. No shop should charge that much to weld a flex pip. I just got mine replaced. the flex pip costed me 39.00 and the welding labor was nowhere near 350.00

 

350 is a lot but that is an accurate price as muffler shops do not care about your pocket. The idea is that if you can afford an Audi you can afford to fix it.

The idea isn't too nice on the pocket but true nonetheless.