Volkswagen: oil, tappet noise, pan gasket

Question
the oil light is on there is oil in there but it doesn't seem to be circulating as you can here the tappets. the oil pump seems to be working as you can feel it hittin your hand once the oil cap is moved. please diagnose.

Answer
Catherine,
 First of all, you should never run an engine with an oil light; severe engine damage can occur.  As far as what could be wrong, the oil pump could be bad(internal to the engine) or they may be a clog (sludge) in the system (old oil, too long between oil changes.)  The "tappet" noise is a very bad indication that the engine is in fact oil starved; this is not simply a bad oil sensor.
 I would start by dumping the oil, dropping the oil pan and inspecting it for sludge.  If you find this is so, then clean it out, put it back on (you'll need a new oil pan gasket), partially refill with oil (minus one quart) then use an engine oil flush product, running the engine for the recommended time on the product (perhaps 5 - 10 minutes.)  Then dump the oil again, drop the oil pan again and clean any more sludge broken loose, paying close attention that the oil pickup tube is not clogged.  Then put it all back together again and refill completely with fresh oil (and new filter too.)
 Hopefully it's not too late and there isn't already damage (spun internal bearings, scored cylinder walls.)

Rick