Had the very same sensor crack on me last week.  Good news, even from VW
the price was $9  with o ring no less.  Mine was bubbling and crusting
around the seal and I thought it was left over orange stuff from the last
time I pulled the expansion cap off and spewed coolant everywhere.  They
don't call me Bullwinkle for nothing.

Dimwitted Moose  and Flying Squirrel

----------
> From: GMBulley@AOL.COM
> To: Vanagon@VANAGON.COM
> Subject: Re: low coolant indicator lamp
> Date: Saturday, July 18, 1998 9:10 PM
>
> In a message dated 98-07-18 12:12:50 EDT, Dagbear@AOL.COM writes:
>
> << The red blinky on my temperature gauge sometimes refuses to go out
after
>  startup even though the sensor is immersed in coolant.  I understand
from the
>  Bentley manual that the light is activated by two conditions, the first
is
>  when the coolant in the tank is low, the second is when the temperature
gauge
>  reaches maximum.  How do I isolate the cause of this malfunction  and
correct
>  it? >>
>
> Often, (thrice in 160k with me), the sensor cracks down the middle,
allowing a
> tiny amout of coolant to fill the contact area where the plug attaches.
The
> test (for me) is to replace the sensor, which is about $20, and keep
rolling.
>
> gmbulley
> cary, nc