this is indeed abnormally high. Audi considers up to 1l/1000 km as normal, consensus within this forum is that up to 1.5 l/1000km are perfectly normal for any early ABH engine with more than 150.000 km.
Did this develop over time and the engine was gradually using more and more oil or did this behaviour come all of a sudden (or did you buy this car that way)?
Does the engine run OK and on all eight cylinders? Did you make a compression/leakdown test?
Check the valve guides and seals as well as the valves themselves. Burnt outlet valves are not uncommon in heavily used 4.2 engines.
Thomas Müller did have a
similar issue with his engine and there the valve guides were to blame.
If compression is decent, you can rule out any valve problems, have checked/replaced the crankcase ventilation tubes and the engine continues to burn obscene amounts of oil, you might indeed have this "nikasil" problem where the nikasil coating is washed off the block by sulphuric combustion byproducts originating from fuel with high sulphur contents.
If it really is the "nikasil" issue, you are looking at a new block, as IMHO there is no economically sound way of repairing this. I have asked at a reputable specialized shop (
http://www.rimotu.de) for an estimate to recoat the nikasil. For the amount of money this will cost, I`d get a brand new short block. In this case, an economically sound way to get your car back on the road would be to purchase and install a used engine. To locate one, have a look in the parts exchange on this board available behind the
Marktplatz link in the navigation menu.
Cordialement,
Bastian