Pat,
the problem you are encountering is common with 16v. incidentally so is the idle problem that people have been asking about. the one where a 16v does not idle smoothly but hunts between 800 and 1000 rpm for the idle point.
From what I have been able to find out, the root cause is the KE-jetronic injection system. The K system is a piece of work. If I'm not mistaken, many VWs use that system. The problem comes when Bosch too a mechanical system and piggybacked electronics onto it in an effort to gain fuel efficiency, reduce emissions and get more power out of the engines.
With the purely mechanical systems, you could adjust the settings yourself, but you'd sacrifice some efficiency when conditions were not equal to those for which you made the adjustments. In essence the electronics are meant to make the system self-adjusting so that it can compensate for the varying conditions that engines are exposed to and therefore spend more time operating within "optimal" specs.
The problem occurs when the system starts to fight itself. ie. at one point the air-fuel is too lean, so it sets itself richer. until it get's a little too rich, so it starts to lean itself out until it gets too lean, then it adjusts back the other way...and you can see where it's going. either the required adustment is less than the smallest increment of adjustment possible by the system or there's a feedback lag so that the system cannot react in time to control the adjustments.
the upshot of this is that with the 16 in particular (not sure about the euro versions, but I know this to be true of the NA models) they are TOTALLY inconsistent when it comes to how well the engine runs. Some cars never experience idle hunt or surging, while with others it's a chronic problem.
I've spoken with several MB techs in the area that own or have owned 16vs and the consensus is that "these cars never ran properly from day 1. unless you were lucky."
mine hunts and surges too, but the way i look at it is that it's the nature of the beast. yeah, it's a PITA, but hey a Lamborghini Countach is a fast sexy car, but DAY-UM is it ever a ***** to parallel park!
