This one is killing me, had an O2 sensor issue which kicked on the check engine light. Replaced it and when I went to clear the CEL, it was now detecting a #3 cylinder misfire. I swapped the #2 and #3 coils to see if it was a plug or coil issue. Issue stayed with three. Nearing 80K and 6 years old, so I picked up a set of NGKs and replaced em. #3 still misfiring. Decided to take it for a drive with the VAG monitoring 015 and 016. Once the thing gets over 1100 RPM's, misfires stop, the second it drops to idle, they start racking up again. Idle is running right around 800. If anyone has any ideas, would love to hear em.

Its a 2000 1.8T manual.

Have you checked each of the power output stage pin's resistance? Using an Ohmeter on the 5-pin side connect between the center pin (#3) and the other four pins. Ensure there are no open readings.

Sorry for the delay, but you lost me with the 5-pin connector for the power output stages. I have an ATW engine which only uses a 4-pin connector, and both 2 and 4 were showing voltage. I even went ahead and did the activation test which strobed between terminals 2 and 3. And according to the service manual, I should replace the defective coil. But if the misfires stay with the 3rd cyclinder even when I switched the coils around, it must be something else. I am just kind of at a loss. Any other ideas?

The power output stage is on top of the airbox. unplug the engine side and hook a test light to each terminal and have someone crank the engine. All 4 should light up, if one doesnt then its bad. (not an uncommon thing)