WHERE IS THE SENSOR LOCATED?

This is a known problem. The temp sensors go bad every so often. VW recognized this a few years back, updated the sensor and accordingly changed the colour from brown to green. oops.... They still go bad. The sensor is on the drivers side of the engine, on the back of the head in what looks like the thermostat housing. If you have a man trans there's a set of glow plugs commin out of it. This is the only temp sensor on the TDI. There's a plastic horseshoe clip (the dealer should have offer you one when you bought the sensor) you have to pop out, then wiggle the sensor until it comes out. MAKE SURE THE OLD O-RING COMES OUT, this will make instaling the new sensor much easier and will prevent your all your coolant from leaking out.... Yah, I seen it done, not good. Worst part is you can't see what you are dooing so good but its fairly simple. Good luck and happy motoring