Dieseldorf: Your advise was very good.
After having my son turn the wheel with everything shut off and jacked-up, the vibration was from the ends of the rack - sounded and felt like dry o-rings - gripping or grabbing. It was loud even without power or resistance!
I ran out to the VW dealer to get some juice. The local Foreign parts shop was out of stock. I bought enough to drain, fill, recirc, drain and re-fill. Believe it or not, the noise went away almost immediately!. I ran the Valvoline stuff for 9,000 miles without a chirp and after two warm days, the warmth must have accelerated something.
At any rate, I may have lucked out - I don't know how much permanent damage was done but it seems fine now. The steering rack is $600 list at the dealer, REBUILT. Best case, alternative suppliers are probably $400. I'm keeping my toes crossed.
That VW Juice and the Pentosan are as much as $25 per liter but very cheap compared to that rack. The owners manual and the Bentley both said to use the VW product but made no warning about special lube.
Lesson Learned.