Intermediate Shaft failure, engine ruined. To say I am disappointed that the engine did not last 35000 k is an understatement. Sounds like a poor design as I did not abuse the engine in any fashion, though I did use it to it's fullest potential at times ;-)
Dealers estimates $20,000 to repair for a car that is worth $20k.
Both the dealer and I will pursue with Porsche for some compensation as they sold it to me and serviced it.
