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DO NOT drive the vehicle for more than a minuet or so with the Malfunction Indicator Light (MIL) flashing as this could permanently damage your catalyst.
Misfires are most often due to failed coils. The standard diagnostic procedure would be to switch the coil from #1 with another cylinder, clear the code and see if the misfire follows the coil, condemning the coil. These coils are very delicate and can be damaged if the special tool that pulls the coil evenly straight out. In absence of the tool, I suggest you GENTLY pull the coil up with your finger tips evenly on both sides.
If the misfire is still in number 1 cylinder, there are several other possibilities. Next would be to check compression, and swap spark plugs. I realize you replaced the plugs last night, but just do it anyway, you never know.
If the misfire remained at #1, and the spark plug was good as well as the compression, I would swap injectors next, clear the code and see if it followed the injector.
If not, and this were an earlier 1.8T that had a separate ignition coil control unit, I would suspect the ignition control module. But this being a 2002 it would likely be a Engine control Module (ECM) or wiring issue.
Usually you won't have to go further than the coil. Considering your "specifics", it may be more involved.
If you have access to a VW/Audi scanner capable of reading measuring blocks, it would be quite helpful if you could tell me what the first two display fields were in measuring block #32. This must not be taken after clearing the fault memory as the values are reset to 0%. But, let's check out the other things first.
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