You are up for an engine rebuild. Remove the engine and turn up side down in a stand. Remove the sump and find the failed bearing by taking off the big end caps. If you find a con rod damaged you will have to remove the head and that piston and replace the con rod. If it is a main bearing that has spun you should only have to replace the crank shaft and fit new bearing shells Either way you will need another crank shaft. Check the price of a low mileage engine from a wrecker as it will be quicker and possible cheaper in the long run
SOURCE: 2004 VW Touareg, Low oil pressure stop engine now light
Sounds like and electrical problem in the oil pressure sensor circuit. I wouldn't rebuild the engine just yet. Hook up a mechanical oil pressure gauge and drive the vehicle with the gauge on it so you know exactly what the oil pressure is.
SOURCE: oil pressure problem
You oil pressure sending unit has gone bad, it's common to go bad and some even leak oil.
The oil pressure sensor is on the back of the block on the passenger side, you can get to it from the top and not from the bottom. There are (2) switches back there that screw in to the block and you can only see it from the top of the engine. The Oil Pressure Sending Unit is the one wire harness with a green and white strip on it. The other switch has more wires to it.
When you pick up the new sensor, make sure you get the right one. make sure you get the Oil Pressure Sending Unit which sends variable oil pressure and has only one quick connect for the wire connector. The oil pressure switch is the one that only activates the oil light on older engine.
Once you get the right part at Auto Zone for around $9.00, disconnect the wire clip with the green with white strip on it. and use a deep spark plug socket with a extension and u joint to get the sensor out. The sensor comes with teflon tape already and no oil should leak out from the block. It as simple as replacing a bolt and reconnecting the wire connector.
Good luck and hope this helps, take no more then 10 min to do but about 5 hours for the engine to cool off LOL
SOURCE: Oil pressure drops when idling and knock from main bearing.
How many miles on it? Could be the oil pump if the oil level is full.
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