This is possible the biggest ripoff I have ever heard of. Usually, Audi dealerships charge 1 hour for the diagnostic test, and its done by sticking a small hand-held machine into the diagnostic port under the steering wheel and the error message pops up 30 seconds later. Charging 100 bucks for a 30 second job is a rip off, but charging $550????????? No way. No friggin way. I dont care that its a luxury car. $550 is WWWAAAAYYY too much to just have the machine read the error message. Coupla options you could do to sidestep this huge ripoff...
1,) Go to another dealership. This one sounds sleazy as hell.
2.) Invest in the hand-held machine yourself. Heres a link.......
http://www.automotive-diagnostic-tools.com/Automotive-Code-Readers-s/40.htm
A little expensive for some of the higher end ones, but it pays for itself the first time you use it.
3.) Take it to Autozone or another car parts place and let them know of the issue. Usually they have the code reader themselves and let you know what the problem is for a small fee, much smaller than $550.
If you find out what the problem is yourself, without the help of the dealership, you can relay the error message to them and sidestep the $550 diagnostic fee. Of course, you have to pay parts and labor still, and they will probably rip you off here as well. A lot of independent garages do quality work at 50-70% the price that the dealership charges. Why not go to one of those? Let me know how it works out.