Hey, welcome to the world of Audi. I'm not sure how much help I can be directly, but at the very least I can provide you with a little back story on your car/engine, and maybe trigger some more knowledgable forum members to respond also.
My first car was an MkII Jetta, so I'm familiar with the VW to Audi jump myself. I replaced that with a 1995 Audi 90 quattro. Now, as of 1992 the 80/90 entered what we in the Audi world call the B4 generation. Your's is a B3 (you may be familiar with this nomenclature, as VW used it on their Passat lineage as well). Mechanically, our cars are very similar, and share many parts. Unfortunately (for me) one major component the B4 90 did not share with the B3 was the engine options. Mine comes equipped with the 2.8L 12V V6 - A durable tank of an engine (mines well over 230,000 miles now) and fairly peppy, but one that suffers from a severe lack of aftermarket performance upgrades of any kind.
Your engine, on the other hand, is one of the most revered of it's kind, made famous by the Audi Quattro S1 (UrQuatrro) and S2 Rally Champions for its incredible performance (when turbocharged) and durability. I am a little embarrassed to admit that I do not know as much about the 20v as I would like to, but if I'm not mistaken, the main problem with your engine is that it's not turbocharged. Engines designed to benefit greatly from a turbo, such as the 20v, are often sluggish when naturally aspirated. That is not to say that there isn't something wrong with yours right now, because it sounds like there is, but it could explain some of the sluggishness.
I'm sure all of that wasn't terribly helpful, but this should be:
^That website is a wealth of information about your engine. Poke around there for a bit and I'm sure you'll find some of the answers you are looking for.
I hope that helps. These cars can be a pain in the ass to work on sometimes, but they really are great vehicles. Don't give up. Good Luck!