I noticed the hot oil smell in my 2004 S4 Avant starting a few weeks ago, accompanied by a miniscule increase in oil loss. No visible dripping. The car is currently in the shop where they've found a leaking valve cover. As the car was due for an (early) 35k maintenance anyway, I took it in but didn't specifically mention the oil problem, just to see what they turned up on their own initiative. So I'm pretty confident their finding is authentic (and also that the 35k inspection, at least in this case, involved actual inspection, which is good).
Sounds like this might be shaping up to be a common issue? And not a cheap fix, I might add. (Especially as the dealership is the only place I've been able to find around here who seem to know one end of an S4 from the other.)
I'd be curious to hear if this is age- or mileage-related. At 24,500 my car is very low mileage for its age. Are other people running into the oil problem at similar mileage, or just at the same time?