Aside from the typical VAG reliability issue, you seem to have run across perhaps one of the worst issues with owning a VAG, the dealer network.

I doubt that the glow plugs were really bad. Typically the problem ends up being either with a relay or the wiring harness going to the glow plugs. But VAG service will gladly charge you for the most expensive repair, even if it doesn't resolve the issue.

It's over ten years old, most of the above list is just wear and tear. I think you're being too harsh on the car.

I am writing from the U.S. I owned a brand new 1983 Nissan Sentra diesel 1.8 liter, which I maintained myself using the original dealer service manual. This particular model was manufactured only to 1986, unfortunately, so because of lack of spare parts at the junk yard and expensive parts relative to domestic parts, I sold it in 1992 for practically nothing (25 dollars) ; shows you demand wise no interest in these types of cars to this day. I loved it. No problems other than regular maintenance. It had only 113,000 miles and looked brand new; no body rust and factory underbody rustproofing looked like new. At the time of sale it needed a starter and glow plugs; I wished I had replaced those and kept it. I felt it was so solid it would still be on the road today.

Back to the review. When it is cold outside the engine cylinders need to be preheated. There is a glow plug screwed into the engine going into the cylinder. There is one glow plug for each cylinder. I had a metal bracket bolted over each glow plug connecting them together, and at one end a wire connected to one glow plug, which carried the electrical power to all glow plugs into the cylinders. OK now. When the car is started each time, a yellow dashboard light with a pigtail wire goes on along with other lights for a few seconds and goes off. This is all it takes to start the car here in Chicago for three seasons. In the winter when the yellow light goes off and before you start the car return the ignition key to off: back to yellow light until it goes off: back to off and then after the yellow light goes off for the third time, turn switch fully to start: This worked for me.

Check your connections. If your glow plugs are original, they need replacement. I could not start my car in the winter because of them. When they were working, I had no problem starting up in -25F with the cold weather we had here in the 1980s.

As for acceleration I had quick starts but slow acceleration like yourself; it was difficult to merge on expressways with big cars here. This I believe is normal for small liter diesels. But I found out at about 70,000 miles my EGR was not working because a small wire on the manifold lost its insulation and shorted out, not operating the EGR; found out by visual inspection. This restricted air into the engine, causing it to be slower than normal, which probably led to my head gasket leak.

Mileage wise I was also getting 50mpg on the highway going 55mph. Getting only 35mpg at 70mph does not sound right. Even gasoline engines do not have that much discrepancy. If your exhaust is more smokier than normal check your air filter, prime your fuel (could help your speed). Worst case scenario is a bad catalytic converter (I had one;not sure of this) or a worn engine (I was behind a semi on the expressway on a dry day, and my windshield was spattered with drops of diesel fuel from its exhaust.

I hope this helps. I'm glad you reminded me of old. Thank you. Good luck.