It is probably caused by a leaking cylinder head cover gasket.
My 2001 Passat leaks oil and has the smell too.  I had the cover
removed to look at the gasket. It has two parts. One is a circular
one along the edge of the cover, and other seals the spark plug
holes in the middle of the cover. Very strange design and a very
bad gasket. The gasket is very thin, light, fragile and expensive.

David

--- BJ Feddish <bfeddish@NETREACH.NET> wrote:

> My wife's Audi has been smelling like burning oil for the last few months. I
> ventured into the engine compartment and found this
> http://mywebhopserver.feddishbasses.com:81/vw/audi.html . It looks like a
> little puddle next to the spark plug hole. Any suggestions as to the source
> of this oil?
>
> Thanks,
> Bryan
>

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