Yeah, but a leaky heater core has the interior smelling the sweet smell of vaporizing glycol. As well as an unclearable fogging windscreen.
And Mongler, "cheep autozone stuff"? Have you priced their cheap stuff lately? It may be cheap, but they sure don't pass along a cheap price.
Anyway, if you have a coolant leak, you will notice the drop in coolant level at the recovery tank (ball). A circulation problem (i.e. failed water pump) would not get you cabin heat, so you're good there. A bad thermostat, rare but it happens, may get the overheating symptoms you say. It is rare to have one fail closed as they are designed to fail open, but it can happen. I point at the thermostat on this, because if you are on the highway, and the radiator fans have both failed, you still won't overheat. In your case, you are seeing the overheat, you have circulation, the only thing left is that the thermostat is preventing coolant running through the radiator. I am assuming that the wrong coolant ('the green stuff') has not been used, as this could clog the radiator.
Foam bits in the cabin from the vents. Yes, this is irritating at best. VW, in their infant wisdom (aka accountants who don't know diddly about cars so they force crap on the engineers, and no I didn't misspell infinite) used thin urethane foam on the ducting doors in the HVAC box. The stuff degrades, turns to dust, (you saw what happened to the foam on the underside of the top engine cover, right?) and on the way there, chunks break loose and blow in your face. There are a large number of threads on this, and on vwvortex, mytdi<something> or something like that. Anyway, since the foam covers large holes in the doors, you lose the ability to direct the airflow as well as proper mixing of airflow for temperature control. Interestingly, this does not apply to the doors that control interior air source (recirc vs exterior vent) and directing the air to the defrost vents, since those two are smaller solid doors.
Anyway, the best way (also the most difficult) is to remove the hvac box so you can properly re-cover the doors. Some sort of padding on the door edges is needed. Covering the holes is easy once you clean off the foam and put some sticky sided aluminum tape over them. You can get it at a good hardware/home supply store as the 'real' duct tape. And Mongler did NOT overestimate the job. It is a major PIA, not difficult, just tedious and kinda long. Most people remove the front ducting and do enough from there to avoid a complete dash teardown. I'd recommend that if you don't need to replace the heater core. And like I said above, a leaky heater core will make the interior smell like coolant, not diesel exhaust, so if you don't need to, don't try and replace that core.
Diesel exhaust smell in the cabin: if you find the fix for this, please let me know. I have the same problem and just replaced my leaky heater core the hard way, but messed up the steering column, so it will be a week or two more before I know if I fixed mine or not. Probably not since I didn't do anything that would address that problem.
Good luck on finding your fixes.
Cheers,
PH
