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Water pump, thermostat and timing belt should all have been replaced together at the same at 80,000 miles/5 years.

If not, do it ASAP.
 
It is possible to do DIY. I removed the belt also to change the thermostat and then realized from Audi folks that it is possible to remove it without removing the belt (just a little bit shifting the belt is OK)

And yes it is the Thermostat. I think all 2004's supposed to change them by now, they are all failing one by one.
 
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