Finally fixed this issue once and for all a few days ago.
First off, I burned the tank down very low, then slid a 12 quart oil change pan under the water separator and cranked off that cap completely and drained the fuel out.
Then I took that whole *#$*@#* water separator tank off. Start with the four 17mm nuts, then you can move it around and take off the two hose clamps, and take the several screws off the water level sensor so you can pull it out of the tank. Take that tank and plunk it in the dumpster.
The two remaining rubber hoses are semi-permanently crimped onto the hard plastic fuel lines, one going to the fuel tank and the other to the engine, the later being longer and juuust the right length... I used a dremel cut-off wheel on my electric drill and carefully dissected the rearward crimping that holds the rubber hose to the plastic fuel line that goes to the fuel tank and got that hose off and out of the way without damaging the plastic fuel line (be careful!).
Then, the fuel hose crimped on the to-engine side was long enough and easily supple enough to bend over and connect right onto that plastic fuel line leading to the tank. To secure that on, I actually got some of the nice crimp on fuel hose clamps from the local VW dealer, but a normal screw type hose clamp would probably do just fine too, YMMV.
Lastly, I just zip tied the water-level sensor onto something solid down there to keep it out of the way. I guess it's possible if it's really raining hard and there is spray everywhere it might light up the bulb on the dash, but who cares.