air in the fuel system has nothing to do with your oil pressure system functioning correctly or not. did you hook a mechanical gauge up to the engine? the VW senders are just switches, not variable resistance senders like a gauge uses. if you didnt hook up a mechanical gauge, i wouldnt believe that it has oil pressure.
and a T3 turbo will make upwards towards 40 psi boost, it wont be efficient, but it will do it. the BOV opens at 15 psi. 20-25 psi will be real fun, and still have the turbo be efficient.