Mark, my MkV R32 is in with VW Watford for the same thing right now- they have had it for 2 weeks (the coolant leaked onto the wiring loom and shorted out most of the electrics!)
Only an 07 on 30,000 miles so covered under warrenty too.
The dealer said the exact same thing to me- first time they have ever had one.
Meant they had to remove the engine and the full interior cos it was too badly damaged by the water to be salvaged.
Picking it up early next week, just hope it all went back together as well as it came out of the factory!