I want to post this thread to help guide others who have this issue in the future.
I connect my OBD II scanner, wouldnt you know it, it wont link with the car. I researched the hell out of this issue. I think it definitely boils down to the aftermarket Kenwood CD/DVD player installed in my car. I tried unplugging it and all sorts of other things. Ultimately, I decided to take it to my smog test guy, whom really takes care of me. That means he doesnt rip me off. His scanner would work with the ignition on, but when the car was running, it wouldnt work. He said that there may be too much current going to the OBD II connector power port causing the scanner not to work. Luckily he hooked me up!
I am not sure, but I think the only way of fixing this issue, is to install the stock radio. This may not work, the damage may have already been done. I dont know.
I also came up with an idea to cut the power wire to the OBD II connector, and splice a seperate power line, maybe this will fix the problem of too much current....I dont know, I didnt try.
The easiest way around a problem like this, is to know somebody with a good scanner, and if you need to smog your car, know a smog guy that can cheat the system.
I really hope this helps somebody, I know how frustrating it is to have this problem, I just went through it on my 2000 A6.