The BWA engine can certainly handle a heck of a lot more than the stock set up throws at it. I would agree with Bacillus that the rods would be the 'weak' point but, even then, may only be a problem if the engine is abused further as he says (or nitrous thrown in to the equation). In fact, there is an argument that a Stage 2+ on a K03 is pushing the engine/turbo to the limits more than a K04.
Also, I have found that everyday driving is a very tame experience on a K04 even when compared to the K03 due to it being more laggy. The K03 power would come in routinely and give the car a 'kick'. The K04 is more of a 'Jeckyl and Hyde' beast - 'normal' driving and the turbo keeps itself quite contained...hold on for the revs (or drop down a gear and floor it) and its woohoo time
! Not sure if this is bizarre logic on my part but the point is that the K04 may not be so prone to giving the 'power kicks' in everyday use which
might be beneficial in the long term. Of course that theory may be garbage and is certainly garbage if you really use that K04....and why wouldn't you?
I have only heard of one problem to my knowledge on a K04 conversion and that was a broken piston ring I believe on VRS_Harry's Octavia over on Briskoda.net. However, I think Harry is known for, err, getting the most out of his car
