I own the same car. In may '05 the compression of the 8'th cylindre went away completely and the engine was broken. In the last month before this damage happened, my engine consumed about 6 Litres oil for ~1.000 km.
I would say that the engine is short to death, because it consume the same huge amount of oil like mine.

I think it's time to search for another, used engine. If you find a good used 4.2 l ABH motor from the Audi Type 'V8' you should change the two transmitters for oil pressure and the two transmitters for water temperature at the motor to get these things working the right way in the 100 S4.