Recently purchased a mk1 jetta with a few quirks. To start there is a 1.6l engine in a car that didnt come equipped with that size engine, i am having some starting issues with it even though it will start right up with the feeder line (red circle) to the fuel distributor and continue to run when tightened up again. There is a adjustment nut and bolt combo (green border & circle). I am at a loss with trying to find out why it is having back pressure to the fuel. Exhaust smells rich while its running. Braking causes the engine to lose power but not stall. The ac compressor and heater core have been completely cut out of the picture. The coolant lines to the heater core are rerun to the engine. Brake lights didnt work when i bought it and just ordered a re-manufactured master cylinder with internal switch. Finally the radiator is liking to steam up and overflow when its running in the garage, but didnt even steam on the ride home.
This car uses CIS injection and the first step with a performance problem is to run the CIS fuel pressure tests. This requires a specialized fuel pressure gauge and the specs on line pressure, warm control pressure. cold control pressure, etc, etc.
Without that you’re dead in the water on diagnosis.
The part you’ve circled is the pressure regualtor and is adjustable with shims of varying thicknesses but that is not likely the problem.
These cars are very sensitive to vacuum leaks so everything should be carefully inspected to make sure there are none; especially at the fuel injector seals.
Wild guessing on a rich running problem I might say the control pressure regulator has gone stupid but that’s where the special pressure tester comes into play.
As to the radiator steaming, hopefully it’s nothing more than overheating due to a faulty thermostat, inoperative cooling fan, etc.
You’ll either want to find a good (old) VW mechanci, or buy the Bentley manual for your Jetta, but they’re not cheap ($70):
http://www.bentleypublishers.com/volkswagen/repair-information/vw-rabbit-scirocco-gas-1980-1984-repair-manual.html