jschick

have you checked the fluid yet? after you verify the fluid level, I would check the function of the solenoids with Vag. You could have a bad pump (not producing enough pressure) you could have a clogged filter, stuck solenoid etc.
my bet would be a bad or dirty solenoid, I would also try to recode the tranny, if you are now 00002 try 00000, 00022, 00012 see if any recoding takes, if so your ecu is probably good and believe it or not it can sometimes fix this type problem. I just bought a project 99 A4, with a "bad tranny" it would go in 1st, but when shifting to 2ond and 3rd it would go to neutral unless you floored it then in 4 and 5 it would drive ok, if you slowed down it would hang up in neutral again, i changed the fluid and filter with no effect. I recoded the ecu and now it works perfectly, so far I have been 2 out of 3 recoding has helped. my 2ond car with bad tranny it did not help so it is not a cure all! it had a bad solenoid, i tried cleaning the valve body but ended up replacing the tranny.
but you will most likely need to change fluid and filter, and if all else fails try some seafoam transtune, if you have a stuck solenoid it could clean it up, but then you would need to flush the fluid again if it works, but this is better then a new tranny!