Heard a few reports recently of Powerstation, basically not enough cooling etc. There was a VAG day this weekend and cars that were running 270bhp were putting out 214 and an S4 based TT normally good for over 500bhp only put out 360bhp, so I'd bear that in mind.
My EVO III with 14 psi, fuel pump, malpassi rising rate reg, 3 inch exhaust including dump pipe, bigger FMIC and air filter made only 215 hp at the wheels. I would be stoked with more then that. Have you changed the turbo or anything or completed any internals?
Did it actually drop power on the higher boost level?