Man that sucks, these 4.2s are not cheap to work on out of warranty.
What other problems is the car experiencing, and what codes are you throwing? If it's just misfires make sure to check all coilpacks first. The two most common catastrophic issues are the cam tensioners/chain guides and the cylinder wall scoring issue. Telltale signs of scored cylinder walls is heavy oil consumption and can be diagnosed by a compression/leak down test. People with cam adjuster issues have also seen heavy oil consumption, how is/was yours?
Also if it is timing chain related you'd probably hear it rattle especially on startup. Have you ever experienced that? 1-5 seconds of rattle is normal but if it continues for longer it may be trouble.
You can find a lot of info in the S4 forum, and this thread catalogs catastrophic engine failures:
http://www.audizine.com/forum/showth...pdate-12-03-11
Lastly, I would keep on AoA. Write them a letter everyday, start a post about your experience on every forum and create a blog talking about and show it to AoA. See if you can't bully your way to getting them to cover your engine.

Originally Posted by
simona
Audi of America took 3 weeks to get back to me. Audi of Oakland couldn't do anything without charge without AOA. Towed my car to Freddie at East County European yesterday. He quoted me less then 3k to take out the engine.
I get on from time to time but only write/reply when I see its is required, do not like to BS.
Frank Santos and mechanic Cory at Audi of Oakland were very honest. Some of their old timer mechanics remember Freddie. They both agree its a better idea to not have an Audi stealership do anything so big at full charge.
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