mk2bal: drain all the fluid out and replace with red, you might have to top it up then drain again to get rid of the rest iof the green in there. you shouldn't mix the 2 types its not a good idea! if flush and refil with fresh ATF doesn't help then you prob need a new pump. deffo need deflection to be around 5mm, 10mm is too much as you now know because its slipping! on my mates mk2 we ran out of adjustment for some reason, so i had to swap on a mk3 pas pump pulley which was slightly larger diameter. a new belt prob would have solved it but where you gonna get one at 6pm on a sunday

chris: does sound to me liek it needs a new pas pump, but its a bit odd that the noise goes after a bit. maybe check the system over carefully for leaks and make sure its topped up. saw a similar issue and it turned out to be a problem with a leak/hole somewhere letting air into the system. the pumps make a horrendous noise if they run dry!