sure, tdi heads will bolt right on, but thats it. it will never run or do anything. IDI pistons dont work with TDI heads. the 2 different injection systems are too different to work. the only way you get to build an Mtdi, is to take a WHOLE TDI ENGINE and build a mechanical pump and bolt on that. you dont mix and match internal TDI and IDI parts.
as for your 11mm 1.6, its up to you. if you do it, buy head studs. thats the general consensus on the other diesel forums. 11mm blocks NEED head studs if you are going anything over stock boost.
yes, im still running 23.5 comp on my 1.5, 5 hole head gasket, with 2 bar boost. 47:1 compression on boost anyone? and even stock injectors in a VW are not a restriction. merc injectors are not designed for our pre cups, i personally wouldnt run them. the mercedes guys run AAZ injectors in their performance diesels FWIW.
why is someone trying to get you to NOT put a 16v in your fox? that would be SWEET.
i had alot more than 8 psi boost with stock fueling too. i could get over 25 on a stock n/a pump with the fuel screw turned up.
what turbo do you plan on using to make 25 psi? dont use something too small, cause a Ko3 or something little like that will be quick spooling, but will be making LOTS of heat at those boost levels. you pretty much need an intercooler for 20+ psi usually.