It is a tough decision.
As you probably know, there would appear to be a preference amongst buyers for diesel; I am not sure I understand if there is a rational component to this, and have yet to see a truly convincing argument one way or the other. Although I do not have an A4, I know others who do, and it is a reliable little workhorse, and for anybody familiar with gas engines straightforward to maintain. So personally I won't enter the Diesel vs. gas debate.
As I understand it, you are correct, new mounting, shaft and prop at a minimum. Cutless bearing while you are at it.
One factor you may wish to consider is the offset of the prop shaft. We had a lively discussion a while back trying to work this out, and understand the implications:
http://www.pearson323.com/forum/index.php/topic,282.0.htmlIt seems that in the factory diesels were offset to starboard, A4 to port. The purpose of the offset is to make it easy to remove the prop shaft (otherwise the skeg is in the way). But depending on the rotation of the engine, the prop will either be a LH or a RH prop - which will either counter or exacerbate any propwalk you may have.
Final thought - regardless of your choice, build in some time while the engine is out to "redecorate" the engine compartment. It is a great opportunity to inspect, repaint, and upgrade in a space which is otherwise a very tight fit! And you may want to consider a non-drip seal, easy to install when the shaft is out.
Good luck....