MarkfiveGTI, I got my VW tailgate badge replaced with no issue under warranty, 3 days before my September 05's warranty ran out. Post some pics, it sounds like white worm corrosion and it is a well known issue, your stealer sounds crap....go somewhere else and get their warranty person to look at it.
Whilst I was there my stealer checked the vw hub caps and even checked to see if the vw emblem on the front grill was starting to go. It wasn't however they were going to replace the hub caps but then backed down due to the fact that my R32 style wheels were not fitted from the factory. I just paid £20 and fitted them myself in 5 mins.
Go elsewhere mate, its a very common problem.
