well, it was still losing a little even after the water pump was done. Today we finally got to the bottom of it,

Between the block and teh oil pump/cooler/filter assembly there is a pipe about an inch long, plastic/rubber with an O ring. well, it had a split in it. new one on order and according to Blackburn and Preston Audi they had not known of one going....

Hopefully this will sort it once and for all