I assume by the torque converter problem, you mean that it has the dreaded P0741 trouble code?
If the front end is as solid as you mention, then, yes, it's possible that the converter is causing this vibration. The 741 indicates that the converter is not able to go into "lockup" mode. Essentially, when you accelerate, the converter allows a certain amount of slip the keep the engine in its optimal powerband. Once you get to cruising speed, a combination of factors are monitored by the engine ECU and transmission ECU to then lock the converter, effectively making the crankshaft speed and transmission input shaft speed the same. This can actually be monitored using a scan tool, and checking engine RPM against input shaft RPM. Unfortunately, the factory scan tool, and the best aftermarket scan tool (VCDS) only display about 3 samples per second, which may not be quick enough to catch this anomaly. I'm speculating that the converter is attempting to lock up, and then being unable to, releases, tries again, in rapid succession, which is causing your vibration.
Still, be absolutely sure that both front axles are in perfect condition. I've seen a lot of vibrations caused by a worn inner axle joint. On the Allroad, this joint is what's known as a tripod joint rather than a CV joint, due to the need for longitudinal axle movement because of the extreme height changes that are available on the Allroad.
If there is any further information that I can provide, please post back.
Thank you for an excellent answer and I am glad to pay and leave positive feedback. One more short question - do I have to replace the entire transmission or can I replace just the torque converter.
My pleasure. Hopefully the explanation was detailed enough.
No, no need to replace the entire transmission. The torque converter replacement is costly enough. I typically will buy them directly from the dealer. I'll go ahead and get a cost for you, since I've got an '02 in the shop with the same code, and I need to put together an estimate for my customer.
Ok, torque converter list is $950
Front converter oil seal is $29.10
Book time for labor is 16.5 hours
So, definitely not the cheapest job in the world, but if the rest of the car is in good shape, definitely worth doing. In my opinion, there is no better all-around car than the Allroad. I know well, since I also have an '02 6-spd with quite a few modifications, so it's my: daily driver, occasional drag car, and occasional road race car.