TAF that sounds like your diverter valve is gone (unless its the solenoid, gives a different error i think, can you post up the fault including the code?), and probably thrown the car into limp mode. You can pick a new one up from vw for about 40 notes, or get a bling forge one for about 90. 10 minutes to fit, then disconnect your battery for half an hour to reset the ECU.
BenjiC now that i'm home from work and had a proper think, the bulging under boost theory was total b*llox, since the system isn't charged yet at the inlet, any leaks would just draw more air in. That again could be throwing up error codes and causing the ECU to hold back on the boost, since more air could be entering the system after the MAF sensor.
You mentioned the Carbonio kit from awesome. That is an induction kit that basically replaces the standard airbox, leaving the stock TIP (turbo inlet pipe) in place, which has left me confused as to which part is actually faulty, since the only thing between the airbox and the TIP is the MAF housing.
