I have excellent news to report. Today, I received a package by mail that included the following:
1) A class action lawsuit brochure information booklet
2) Updated warranty with a revised maintenance program (including free inspections)
3) A letter from Audi telling me that they WILL pay for my timing belt replacement costs.

YESSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSSS!!!!!!!!!!!!!!

Finally! Justice! Hope you get your letter soon! For more info, here are the web sites:
http://www.timingbeltsettlement.com/
http://dockets.justia.com/docket/court-cacdce/case_no-2:2007cv05334/case_id-394607/

A quick note to Alexandra Olson to thank her for making this happen! Audi, got what it deserves and soon, I will too.

I just recieved a notice of class action settlement.  If there is damage it looks like you are covered.  Check with the dealer to be sure.

Previously perry wrote:

Boy, the information is widely divergent on this. My dealer (whose service business is light right now) just told me my timing belt on my 2002 was "frayed" and should, for the sake of the engine, be replaced now, despite that I have only 22,000 miles on the car. To the tune of $1,800 (including water pump). Does this sound weird, or what?

hi perry,

so what did you decide to do with your timing belt?  my car has 27,000 miles, year 2000, but the first owner bought it march 2003.  so about 5.5 years of driving.  after receiving the letter from audi to get a free timing belt inspection, the dealership checked and suggested that i change the timing belt.  i can't believe it needs a change now.  i called audi to complain but they won't do anything.  i feel the belt was defective to begin with if it needs a change already.  i know it's 5.5 years but it only has 27,000 miles!