You put it off just a little too long, didn't you?
All too many 1.8T owners have had timing belt failures. Funny thing is, most of the time it's not the belt's fault. The tensioner often comes loose, letting the belt skip teeth.
But anyway, your timing belt just failed, what do you do?
#1. Use AAA to get your car either to a reputable shop you trust or back to your house until you find one. Of course, this is since you have AAA (it's $88 or so a year for a primary person, less for everyone else in the household) or since a person who has AAA (ahem) was riding with you so you can get a free tow. DO NOT UNDER ANY CIRCUMSTANCES tow your car to a dealer.
#2. Realize this is going to cost no less than $2000-$3000 (initially, might recoup cost) to fix. If you can't afford to be out of a car, note that you could buy a Honda Civic or something else to commute around with for this kind of money.
#3. Choose your gameplan. You have several options:
A. Buy a cheap car to get around until you can fix the TT or sell broken down TT and replace with cheap car. You wuss.
B. Replace your whole motor. As ominous as this sounds, it is most likely the best solution. A used motor in perfect working order with around 50,000 miles on it should run about $1,500 on Vortex. I'd probably expect labor to be around $500-700 for someone that charges $50/hr. When removed from the bottom via lift, the motor and trans come out very easily, however it takes a while to wire. Then after you have your new motor in, you can either part out your old motor or sell the whole unit and recoup probably the whole cost of labor. I'd also throw a new timing belt kit on for $250 if I were you ;)
Basically, you'll be replacing your motor but you'll be keeping all your wiring. This may take some adapting to work with sensors etc on your new motor, so make sure you get a wiring harness from the new motor in case you have to solder on different connectors to work with your original wiring.
Of course, there is some risk to this since you have no idea what that motor runs like. However, buying from a reputable seller on Vortex usually won't leave you with a deadbeat motor.
C. Replace the head and pistons. You'll need new pistons ($100 used on Vortex), new piston rings ($50 if I remember), new head studs ($40 if I remember right) and a new head ($1600 brand new at MJM Autohaus) a timing belt kit ($250) and probably other miscellaneous things I can't think of. You could probably find a used head in working order for $400-$800 on Vortex too.
Problem is, for all you know your valves could have snapped off and messed up your cylinder walls or marked them up with metal fragments. Your water pump could have snapped and thrown bits of impeller all through your block and radiator. This is why I didn't go this route. I didn't want to have to deal with recovering anything else that might have gotten messed up in my motor. Also, this involves tearing the motor apart and reassembling the internals, which was not something I wanted to worry about being done incorrectly.
In all fairness this is probably the cheapest route to go but it has its potential complications. However if you're looking for a good excuse to build your motor, you might as well while you have it apart.
Those are your three options...choose your TT's destiny! Good luck.