The flashing glow plug light and MIL may very well be unrelated to one another. If you have verified that the brake lights work, then it is possible for them to be related, that is usually considered a "really bad thing™.
The only time I have seen both the flashing GP light and the MIL at the same time was when I tidied up the wiring to the 3rd injector - the previous owner of my car installed .205s and did a, uhhh, less than professional job of wiring up the new harness (he did use real VW/Audi repair wires, that was nice. /images/graemlins/smile.gif While the wiring for the 3rd injector was disconnected I did turn the key on to move the steering wheel (dropped the unplugged harness on to the skid plate /images/graemlins/frown.gif ) thus the MIL.
When I finished the wiring job and started the car, I saw the flashing GP light and MIL. Trusty VAG-COM in hand, I connected up and found exactly what I expected - a code indicating a problem with the needle lift sensor, which I cleared since I knew I had been messing around with it. Have not seen it since.
If your car is still under warranty (it should be if you are the original owner) the dealer should be the least expensive option. Don't let any dealer tell you that they have to charge for diagnostics on a warranty claim, that is utter bs. You could also look at the wiring for the 3rd injector and verify that it is in good condition, its an easy check for all but the most severely mechanically challenged. /images/graemlins/smile.gif If you don't mind driving to VA then Car54 is the über-TDI-wrench in the DC area, PM him and see what he says.
Hope this helps...