you have to measure form the centre of the wheel directly up to the bottom of the centre of the arch.
a standard mk2 measures 360mm, 8v gti's measure 340mm and 16v's measure 330mm. pretty much all measuring kits measure from standard ride height so a 40mm drop will only effectively drop a 16v by 10mm over its standard ride height, an 8v 20mm and a standard by the full 40mm.
if your suspension seems knackered then i'ts got to be worth replacing. a decent but reasonably priced set up should cost in the reigon of £200 for uprated shocks and springs. while your at it do the bump stops and top mounts too.