Danny...I know it's just not good to tow a car very far anyway but after looking at a VW transaxle and the power path thru it, I can't see where anything would lack lubrication in a "Flat tow" position. Years ago we used to remove the driveshaft when towing a car (with a tow truck) because the front of the car being up high the oil in the trans would flow back away from the front gears/mechanism's and cause extreme wear due to no lubrication. It was recommended then that "flat towing" without removing the drive shaft was OK for for short distances. We had a policy limit of 50 miles for this.
When you had your transaxle apart did you find anything that you would attribute to the long distance flat towing you did Danny ?
I would love to have a flat trailer but I don't have anyplace to put it when not in use. Installing my tow bar was a P-I-A and I could never back up when towing either. Installing a set of towing lights did a barely adequate job, safety wise as well. Yup, a trailer is the way to go, if feasible !