Okay looking around for the part, local wrecker doesn't have the part with the memory function (which goes for $100CDN), discounted part from one of the dealers at about $145, and cost from another dealer is $175. I've concluded that the part is not easily serviceable but identified where the problem is..... so here goes.
- Pop off the mirror. Just move the mirror manually so you can squeeze a couple fingers in and gently tug on the mirror until it pops off.
- Remove the three screws as highlighted by the red circle. Once the motor unit comes off, just unplug the wiring harness (circled in blue). Note that there's a big finger extending from the back of the mirror that will need to be slotted back into what's highlighted by the green circle when you reassembly things. Just rest the side mirror on the side to keep it out of the way.

- The guts. Fortunately, the whole thing doesn't need to be replaced like the B5 mirrors which is pretty expensive.

- The part itself. You'll need a T20 torx screwdriver to remove that screw in the middle which needs to be done at this stage.

- Using one of those precision small flat-head screwdrivers, insert it into the slot to push the tab and with other hand somehow, lift it up. Work your way around the whole thing.

- The cover removed. You'll see a two gears (one to move it up/down and another side-to-side) and how it fits into the cover that you just removed.

- Next, using the same small flat-head screwdriver, carefully lift up the tabs as shown below and work your way around to remove the cover.

- The four separate parts you should have.

- The internal working of the part.

Everything looked pretty clean in here. - The source of the problem.

For the up/down and side-to-side positioning, there are two potentiometers to track the position of the mirror. This is what's messed up. It's probably need some cleaning but there's no way to remove this part from what I can tell. So I just spun these things around a lot with my fingers to hopefully work out any grime from within to alleviate the problem for now.
I think there is a spray that one can get at an electronic store to clean these things, haven't investigated this yet. So I imagine what I could do is pull out all of the gears, get rid of any existing grease, spray the two potentiometers with a cleaner, clean things up, regrease the gears and put things back together.
When you put things back together, when you snap things all back together and ready to put that screw back in, make sure that the positioning of that centre piece is more or less flat and level. It'll make it easier to put that screw back in. If you drop it in and the top of the screw isn't sticking out by about a quarter of an inch, then it's aligned onto the top of the hole properly.
After things are put back together, some quick tests, the thing seems to tilt down and back up correctly. I'm not sure if there's some vagcom thing I need to do to "reset" the position but it seems to be okay, for now, but i expect it to go nuts again a few days from now.
I'm gonna probably just replace the darn thing from the dealer with the discounted price later on, but it's an easy thing to replace yourself to avoid the labour costs.
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