The 02 ALH has the 4-wire set-up! It amazes me that the ECU didn't show at least one code related to the GPs.
Yeah, sometimes VCDS will say the engine is not warm enough if CTS is sending bad info or not. The Timing in the graph will be fairly close (in the ballpark) when the engine is above 80c.
The CTS has two circuits for Temp info. One for the ECU and the other for the Gauge.
I agree with BobnOH .... prolly a connection issue as well.