Here is how it went down:
First I called VW national and gave them all my info, vin#, explained the rust issue. From what I have seen on the CT forum this is a known problem, and I reminded VW America that it is a known issue for the gen 1 Touareg. They opened a ticket and said take it to your dealer.
Took it to dealer a week later. Dealer looked at it and acknowledged that there is rust after a quick inspection. Pretty obvious it was rust. Said they would follow up with VW national.
About 4 days later local dealer, Harmony Motors Asheville NC, said that a VW claim rep would be in town the next week. I got the impression from the service writer that the VW regional or national rep was coming to my local dealer to look at more than just my vehicle for rust inspection and decision. So I scheduled a time for this "official VW rep" to look at it on the day the dealer said he was coming. I never saw the rep and do not know his or her name. About 30 minutes later, after they took the vehicle back to the shop area, they said I could take my vehicle and they would get back to me the very next day with a decision.
The dealer did not call the next day with an official decision, so I called two days later to follow up. The service writer was a little evasive at first but then said that VW approved a trip to the body shop for a final estimate and then VW would give the final green light for the body shop to repair.
Dropped off the beast at the dealer this morning with a clear understanding from the service writer that the repairs were going to be done, so it is headed to the body shop and I assume there will be no issue with VW giving "final" approval after body shop gives VW the cost estimate to repair.
Should have the vehicle back in 4-6 days and the rust should be fixed. Unless something radically different develops with VW, from everything I have been told to this point, I expect the repair will be completed.
I bet this is a $1,000-$1,500 repair. Not a body expert but when the door skin is rusting apart that is not a $500 buck job.
Hope this timeline and detail is helpful. Frankly I am pretty amazed I got this process to the point I have so far. Generally I am pretty diplomatic in my approach while applying pressure in a positive professional manner.
I will post a final follow up after I get the vehicle next week.