Doesn't the filter on VW diesels have a water separator built-in? It probably wouldn't be as stout as the setup you installed but would probably be a lot cheaper to just grab the filter assembly from an old diesel VW.
Edit: Just read this:
Quote:
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FWIW - i have a FM100 installed as the final filter on my VW TDI and did this writeup:
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So I guess the VW one isn't sufficient.