One of the components is bad in the optical "loop" of the entire system. After several attempts on my 2010, it turned out to be the main MMI controller (first the amplifier was replaced). There are some ways to address whereby you pull one item off the "loop" and insert an optical loop bridge which is a small tool that allows the signal on the optical wire bus to bypass the removed component. From there you can conceivably isolate the bad item which could be one of many things - MMI, amplifier, phone module, etc. If the system is still booting up, the Vag-Com may be able to read which one is bad.
The parts can be very pricey as I found out and through some research some firms (US and hopefully abroad) can repair these broken items. Since I did not want to take a chance on these repairs, I opted not to go this route. However, given the cost I incurred, it might have been worth a shot.
One notable item, the dealer will have to recode the car if the MMI controller is replaced and not repaired. My indy garage was willing to help but did not have the equipment to recode and sadly I had to use the dealer but all is working now.