First I was driving home and clutch pedal went to the ground with a clunk, like the cable had broken. I was able to get my 1986 Golf 1.6 N/A home. I incorrectly assumed that the cable had snapped. I bought a new, manually adjusted cable. When I removed the old cable, I realized that it was not broken. I then searched the forum and read that I should try pulling up on the clutch arm. Unfortunately it moves up easily

I'm guessing from the other posts that this is not an easy fix. Any recommendations? I'm not sure what else to check or where to start.
Thanks
Robert
sounds like what happened to me.
the retaining ring that holds the trust plate on the pressure plate fingers had come loose lodging itself in the pressure plate and clutch disc.
had to replace everything except the flywheel!
yank the tranny off and look at the clutch assembly, it should be obvious what has happened.
I drove it home 20 miles after it happened. I just shifted gears at the right speed and limped it home. Is it possible it is something that doesn't require taking off the tranny?
On my old Rabbit I had to weld the post from off of the column that holds the clutch cable back on because it wouldn't release the clutch. This being MKII shouldn't be the same. I had to take the steering column out and that just wasn't fun all the way around. If the cable is the same on the Golf as the Rabbit that could be another option to look at. Do you have a pic of anything going on?
Everything looks fine. It is just that the clutch arm moves easily, when it should be very hard to pull upwards. When it broke, it felt like the cable snapping, unfortunately something else broke inside i'm guessing.
The insides look like this:

The most common failure modes are:
1) Release finger (20) cracks:

It's accessible *without* removing the tranny by removing the green tin cover (13) on the end of the tranny.
2) throwout bearing (16) jams, causing pushrod (24) to drill a hole thru pressure disk (14). You can confirm this by pulling the green cover and then the throwout bearing, but the tranny will have to come out to replace the pressure disk.
3) springs in pressure plate (1) fail. Tranny has to come out.
www.brokevw.com is the definitive source for good pictures on all this stuff.
it looks like the release finger is fine and it contacts the throwout bearing at a 9 o'clock postion. not sure what the problem is, if I can figure out the trick to hooking the clutch cable to the clutch pedal, I'll try it out.