I am also having similar issues with VW Canada.
I had my temperature sensor replaced on August 1. This was done only after the fourth "flash of death." These flashes were preceeded by lurching and the transmission doing other abnormal shifts. I refused to take the car back until they fixed it because it did the flash and neutral thing twice on a 20-km trip.
Now, I am having the same issues with lurching that I had before the flashing started. I am having a hell of time driving this car in city traffic, because I never know if I will have power or not. It is to the point again that I refuse to let my wife drive it. I am sick of taking it to the dealer.
I had driven the car across North America for a family vacation in July, and got stranded 5000kms from home with transmission issues. VW Canada was not very helpful, and have not even re-imbursed me for my rental cars. My Car was fixed only after the threat of billing VW Canada for my air fare and car shipping costs if they didn't fix my car in time for me to return to work.
They were prepared to leave me stranded for weeks waiting for the part!
After I informed them of this threat and that I was 5000 km from home, the part arrived in a few days.
I too called VW Canada and asked about the extended warranty, they said that they knew nothing about it. They also said they were unaware of any initiative in Canada.
I am totally frustrated, I am stuck with this car and sold my '05 Toyota Matrix to get it. I had no issues with my Matrix, but really wanted a diesel. Now, I am paying the price. Every time someone comments on how good my Jetta Wagon looks (which they do often), I warn them of what it is like to own a VW.
When my power train warranty runs out in 2 1/2 years this car is gone, I think I would lose to much if I traded it in now.
-A frustrated Canadian VW owner.