99.5 1.8TQ 30K
Does anyone know if this means the actual sensor is bad/malfunctioning or does it sound like the electical connection or wiring. I've checked the connection and it doesn't look corroded or loose. I know where the sensor is and how much a new one costs, I'm just trying to properly diagnose this DTC. Bentley CD was not helpful.

Any thoughts?

Mine was a ~$6 part - and a 10 minute repair.

The coolant temp sensors are known to fail - mine at 30k.

Smokin S4 is right. I have the same problem, but I'm replacing my sensor today. I was getting two DTCs because of the bad sensor.

I replaced the sensor and haven't had those code appear again.

I found the part #034919369C for coolant temperature sensor on my 1998 A6 2.8 Quattro Avant wagon (which is actually a carry over from C4 platform despite the year).

Plug is brown color, 3-prong (called 4 pin), threaded into the fluid pipe on rear of engine behind head on passenger side. Relatively easy to get at, after removing intake tube and very carefully spreading the various wires and stuff. Took a big 29 or 30mm socket but should screw out easily (good idea to be as delicate as possible). Some fluid drained out so have a catch pan ready, or better yet add a funnel stuffed under there, but the sealed system should hold most of coolant in.

Thing is I am only half way done with repair... not sure if this will cure the DTC code 16500 that I got... we'll see...?
Good luck!

I replaced the sensor and haven't had those code appear again.

well... code came back. Now I think it's actually the thermostat, like many other forum threads suggest.
I was hoping to get lucky with sensor, which seemed 'relatively' easier to get at.
... to be determined...
Although throwing money at parts seems clumsy, at least I know it's new!