I'm having a little issue here. I have slightly modified 1600cc that I just rebuilt...again. She started right up and purred like a kittne, but then the oil pressure light came on after a few seconds. It's pretty consistent: I'll start the engine and the light will be off for a few seconds, then it'll come on. I did take a chance and gave it a good rev, but the light did not go out when I revved it.
Any ideas?

Do you have a gauge hooked up, Tracey? If not, get thee to a local FLAPS and purchase a cheap mechanical pressure unit. Put that sender in place of the OE light sender (usually left side of block, behind and under the fuel pump) and see what the pressure reads when you start it. If the gauge reads well (+- 15 to 20 psi at idle, +- 35 to 45 psi at WOT), then it's obviously an issue with the light or the light sender. Personally, I prefer the gauge simply because by the time the light lights, the damage is already done.

At this point, I'm leaning towards 2 possible problems. One is the sender. I took it out and cranked the engine...oil galore! So I know it's pumping. However, I didin't crank it long enough to see if the flow stopped. I also pulled the relief vavles and got flow there too. Again, that was just a few cranks.
So, either the sender is bad (or something in between there and the light) OR my pickup tube isn't far enough down.
I'll be looking at it tonight again after work. I'm going to get that cheap mechanical gauge...it's worth $20.
My wife is ready for me to stop spending money for a while, lol.

I bought a cheap oil pressure gauge on the way home today. It definately reads pressure! Here's the thing: Does the stock sender light up if there is too much pressure? I was reading 40-50psi at idle. It went up a little when revved, but not much. Is it just because it's cold that it has that much pressure?

It depends on the weight oil you have in it. Usually, straight 30 weight is run in the summer. Some guys go with the 10W-30...whatever you're used to. A heavier oil will lead to higher than normal readings. If you're running a light oil, then one or both of your oil relief plungers is sticking or you've got a restriction somewhere. Easy way to check that is to remove the plungers and run the engine again and see where the pressure is, then put one plunger at a time back in and check each time. Make sure the bores and the plungers are smooth and not binding (especially the spring) somewhere. The oil light should only come on at low (+- 5 psi) so I'm not sure why it's flickering at a high pressure. Sounds to me like the sender might be bad. But definately check the system, that amount of pressure at idle is too high. You'll wind up blowing seals somewhere, usually at the cooler. Which makes me think - have you got a remote oil filter by chance? If so, check the hose routing: if they are switched, it'll definately send the pressure soaring. Otherwise, if you have the standard VW sump filter, change that and take your oil cooler off and flush it out well (or find a new one). Sometimes they'll get clogged with crap, too, and drive the pressure up. Aren't engines fun?

No! The stock light comes on with pressure under 10 psi. 40-50 at idle is way high. What lind of oil are you running? 30 weight is pretty much the max to run; else there might be something stuck - like maybe a relief valve.

For chevy's you can have a normally open sending unit or a normally closed sending unit and installing the wrong one will cause this problem. Is this true for vw's also??? Did you replace the sending unit at the rebuild? I only ask because the solution was not found in the post. What was the final solution?

Tracey had his car for sale for some time; he might not be on the forum anymore. VW senders are, I think, normally closed as your light will come on with low pressure. Problem is, by that time the damage is done. Better off with a combination of gauges and idiot lights to monitor trends.