As far as I know - the old 1. 6L (indirect injection) VW diesel are an interference engine... I know the 1. 9L TDI's are. So, when the belt breaks - the pistons become acquainted with the valves.
The job isn't impossible - but having to keep the cam, crank, and pump all locked in place while attempting to put the belt on can be a real pain. Messing with the pump timing isn't too bad, though - there's some fudge room built into the brackets so that you can rotate the pump fore and aft.
Matt