[924RACR]

What he said. I'm in the middle of helping a bud replace the clutch in his S2; prior unit was rubber-centered, and would have this odd deal where sometimes it'd work OK, sometimes it wouldn't come out of gear (as you describe, has engine braking with clutch in, trans in gear, and will continue to idle along too). We also thought the hydraulics might be bad, but they checked out fine. Final obvious point for diagnosis was the massive amount of driveline lash.