Looks like cavitation to me.I wouldn't be surprised if this is caused by your delivery valves. IDI delivery valves have a completely different design then DI delivery valves.
It's not from the delivery valves. The TDI delivery valves are a different design but there are a massive number of DI engines using the earlier style of delivery valve. I've used them for a long time (a couple years) in my mTDI without any issues and have even swapped between the 1.6 delivery valves and the TDI ones and after making a little max fuel adjustment cannot notice any performance difference whatsoever.
What does the seat look like now in the head? Is it also worn just as bad? That might be the reason why the second plunger no longer works. Have you checked the voltage at the stop solenoid when running and when you shut it off?