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This only happens when shifting into 3rd gear (on a 7 gear Audi TT).
If I shift when the RPMs are high (say over 2k) then there will be a horrible grinding noise. Instead I have to apply the clutch, wait until the RPMs come down and then shift. This problem has gotten increasingly worse over time.
I assume you mean that the revs are over 2k, if they were over 20k I think you'd get a different sort of noise from the engine bay.
From the description it sounds like you'd got a damaged syncro, especially if this happens when you're shifting down into 3rd. Up shouldn't make quite that bad a noise but if the syncro is really on the way out (which your description suggests it is, given that it's been getting worse over time) you'll get the noise on upshifts, too.
Pretty much the only way to fix it is to pull the gearbox and either replace it with an overhauled one or strip it and replace the syncros. You can also hope that you haven't damaged/worn any gears themselves, that'll make the repair even more expensive. As you can probably guess already, that's not going to be a cheap repair.
In the meantime I would suggest that you double declutch and rev match on downshifts (ie clutch -> box into neutral -> blip throttle -> clutch and move into lower gear) and use slower upshifts to extend the life of the gearbox until you can get it fixed. There's no point in trying to change gears as fast as possible (even on a race track, the gain is minimal) but it's very hard on the box.
I second Timo's assessment: it's likely that the synchromesh gear (AKA synchro) is worn badly enough that it's not able to do it's standard rev matching for you. Instead, as he suggests, you have to come a lot closer to matching the engine revs to the wheel revs, using your right foot with care.
That said, it's possible that you have a problem that is solvable with a different gear oil. I recently switched to Redline's Lightweight Shockproof and I am very satisfied.
If you do have a bad synchro, there's a good chance that a gear oil change would have enough metal in it to confirm the problem. By the way, the metal will likely be non-magnetic: the synchros are usually made of softer brass.
Had the same issues with my A4, 3rd gear grinding going in and out of gear. Then eased and was only grinding when being put into 3rd, (while working up and down the gears). Like you guys mentioned matching revs and putting into 3rd gentilly worked well but it's difficult to do depending on your speed, ie in a national speed limit zone compared to driving around town. I too thought I would get away with a change of oil. What came out was sop pretty, golden and sparkly but unfortunately it wasn't good news. there was so much sediment at the bottom of the pan its definite replacement gear box. Few hundred £'s plater we now have the pleasure of carrying out the work.
