I cannot think of any other explanation of where the coolant could go. If you can make some suggestions of what else to look at to help me solve this I am definitely all ears.
As far as future upgrades, I am looking to go with a Kerma K3 turbo, Colt stage 3 cam, and the other recommended items for this combination from Kerma (tune,inj, etc.). I currently have a Malone stage 2 with the Snow Performance injection. I ordered this car from the dealer new and have driven it since '06. It has 127k miles (new 100k timing belt kit, w/water pump at 95k installed by a VW dealer). I just recently started to play around with the performance upgrades otherwise it has been a commuter car that was lightly driven and still has the original front brakes.
Thanks for the reply and input by the way.