I see the inner bearing for the intermediate shaft is more culprit than the outer. I have to disagree, to only replace the outer Intermediate shaft bearing, as the inner bearing is the passthrough to the head for oil pressure. Besides, the bearings come in pairs. Don't throw away the inner!
You can lose a lot of oil pressure to the head from marginal wear on the inner bearing. Generally, the gear driven oil pump has enough problems without items like loose bearings adding to the problem. I have removed the shaft without removing the engine, but getting the bearings installed correctly becomes a real challenge. It's hard enough to get it done correctly on a stand.
I believe it was from VWVortex, there were some 1.8 20v rally enthusiasts (That engine also has a intermediate shaft) that modified the inner bearing with a radial slot. The idea is to get oil penetration in the bearing and improve the passthrough oiling. Although that does remove some bearing support material, it seems to improve life expectancy. It's a narrow bearing slot they cut. It does improve cylinder head oiling.
The outer bearing will wear, seemingly more, but I think it's just harder to measure the deflection for the inner bearing. Lack of oil pressure to the head is more telling measure of the inner bearing.
There is another place where an older engine will lose oil pressure; the cam caps. When rebuilding a cylinder head, one of the 'unknown improvements' we make is to check each cam cap for clearance. The valve springs push the cam up into the caps and although the head is durable, the cap will eventually, wear egg-shaped. The deflection can be measured with a dial indicator by installing the cam without lifters and cleaned of any oil, and pulling up on the cam. Our clearance goal is .0015"-.002". But my 'redneck technique', we use our bench belt sander to carefully sand the base of the cap in an 'X' pattern. Cross-hatch. When you can't feel any clearance when a single cap is bolted on at a time, and the cam spins freely, that is good. Advance carefully, as you can bind the cam. That trick alone raises oil pressure perceptibly.
Smoke at startup is most likely worn valve guides, if it's only a matter of a few seconds. If you blow blue for 15 minutes, it's likely rings. You haven't mentioned the mileage, but TDI's eat valve guides. They also don't suck oil through them, they just leak down the stem when shut off. You'll get that 'puff of blue' that generally clears up quickly.
As for rods and mains, we check before we dive in. But mileage is a big factor. Usually, a well maintained engine's rings will last 350-400k. The rod bearings, especially on the AHU's seem more fragile: 250k. Mains, same as rings. But each engine is different. Pull the #4 main and the #3 rod to check. Both main and rod bearings are TTY and not to be reused. I don't know the mileage of your engine, but that is another important factor. Check clearance between piston and cylinder wall and the end gap for rings. VW usually allows more than we think is reasonable. Max piston/ cylinder clearance: .0035". Max end gap: .024", and that's stretching it. New: .016" top ring.
My opinion of Plastigage... I don't use it. Journal bearings today are so accurate, they are measured in .00001". Measure the rod's big end diameter. Measure the mains. Measure the diameter of the rod and main journals. If your crank is shiny and smooth, it's most likely good. They are built like a diesel truck crank. Most of the time, we just check deflection and polish them. Be sure to clean out the crank's cross-drilled holes if you remove it.
We have all that stuff in stock. Can loan the seal driver, if you don't have one. We also offer some upgrade pistons, sized and balanced for incremental ring sizing. Audi makes a 79.51mm ring set. It's almost .003" larger. Hone to remove taper and out-of-round, and sometimes, the 'wear limit' rings fit. No boring necessary. We coat pistons up to .010", first oversize and match rings to fit.
My usual thought when rebuilding: "Where do I quit?" It's usually when everything is touched.
'Do It Once and Do It Right'