check timing on dizzy. my passat had the same problem...it was the dizzy timing..
I would expect it to have a 5000rpm limit if timing was out (then again how many mk3 owners go near there?)
My dizzy was shot on my 2E, really bad lagging problems up to 3k, arm had about an inch of play and was causing a hard, rough cold start, misfire, overfuel ect. New dizzy improved the problem but the timing was way off (and there was no mark on the flywheel to use a timing light either). Anyway long story short, never had the 5k problem so assumed the timing was fine... timed it by hand using trial and error, rotating the dizzy - it fixed a multitude of problems.
I assume you have bought a genuine temp senor as well, the ones from GSF caused more problems on mine than they did good. Hope you fix it, I spent a good 3 months this year pulling my hair out over a similar problem.
edit: also if you buy a new/used dizzy, just be careful it matches the one in your car as the differing ECUs set the timing differently. There are two different types. One has one slot cut in the casing so it sets the timing from the first contact only, the one I needed had 4 so it keeps track the whole way round - right pain in the ass.
