I am in a similar situation. The downpipe on mine is cracked just above the cat. One shop said it might be weldable, but that his welder wasn't good enough to do it. My regular mechanic tells me that the factory part is expensive because the cat contains the proper amount of the precious metals that do the work, whereas aftermarket cats use less of the good stuff, and it would be bad for the environment to use.
I found a genuine VW downpipe/cat from ECS for $980. Aftermarket downpipes can be had for $350 - $450. I am going to try and get the crack on mine welded, but am thinking ahead if it can't be.
