Check sensor reading after the car has stood overnight but before starting it, should read ambient and the same as the coolant temp sensor etc.
If your IAT is a true 77 degrees C then you have major cooling issues which you need to resolve. The timing pull (or lack of) is irrelevant as the ECU requests less timing to compensate for the hot temps, so you won't get any CF's. Sounds like you have a lack of airflow to your intercooler.... Get an upgrade (alloy S3 will be fine) and check the condition of the A/C condenser as if the fins on this are damaged it will severely impair flow through the intercooler. Get a new one and fit at the same time would be a good idea.
DIN70020 is correction based on a standard temp of 20 degrees C, and 1.01 bar atmospheric pressure, so the closer you are to this, the less correction you will get