probably the heater bypass valve, i had exactly the same prob on my mk2 before i sold it. new matrix but still no heat (never did fix it just sold it!). My Rado aint much better, it gets warm for a while then goes cold and i got told that was the same problem. Bloody poo VW heaters!!

Do a search in the mk2 section, i think the subject of how to fix them has been done a few times!
