Short version: We have a new car. The first dealer didn't get it when promised, got it two days later, but I backed out of the deal.  I ended up getting very close to the same model for a bit less, from another dealer.  The car is now here and we are happy.

Longer version:

This is approximately what happened with the first dealer:

• Sat 2pm: Met with D1, asked if he could match the price quoted by D2 in email.  He said he could not match it but could come within $440 of it.  I said this was OK.
• Sat 230pm: D1 shows me the same car as the one I want, only in V6 engine.  I say I like it.  He says he can get me the V4, should be able to have it tomorrow (Sunday).  I say, I am traveling Sunday but I can pick it up Monday.
• Sat 3pm: D1 checks my trade-in car, agrees with me that it is in great condition and would resell easily.  I say I am hoping for mid Blue-book value (5600).  His offer to me: 3500. I counter: 4500. He counters again: 4000. I say OK.
• Sat 330pm: Lots of papers are signed.  I have all the papers saying I have a new car, I just don't have the keys.
• Sat 4pm: D1 gives me a loaner car (Jetta with 94 miles on it) and takes my Jetta trade-in.  I transfer all my stuff to the loaner car and say goodbye.
• Sun: Day passes with no call, but I was not concerned.
• Mon 12pm: I call D1 to say, I haven't heard from you, do you have my car?
• Mon 2pm: I get a voice message from D1, something like "The car didn't get to get the the dealership, we're going to figure this out tomorrow.  You know, they release so many cars the last couple days and we tried to locate where the trucker is, but we were not able to do that today. So by tomorrow… any questions, feel free to gimme a call"  I'm starting to get the feeling "tomorrow" is not a firm date either
• Tuesday 9am: As a back-up plan I reach out to D2 to make sure he still has the car I want.  D2 says sure, and I share my story so far.  D2 is sympathetic and says that if I decide not to deal with D1 just let him know and he will take care of me.
• Tuesday 11am: I show up in person at D1 and say "Look, I really need the car today, or we will not be doing business".  D1 and D1.mgr both swear up and down that it will definitely be here today by 6 pm.
• Tuesday 5:50pm: I show up again, and the car is there, but by this time I have decided I am no longer wanting to do business with this dealer.  I explain that I have decided not to accept the car.  Many awkward conversations happen over next 60 min but finally they give up on me.
• Tuesday 7:30pm: They explain that they cannot give me my trade-in car back, since that sale is finalized and they have already started reconditioning the car.  Instead they will cut me a check for the agreed trade-in amount.  More papers are signed.  They tell me to come back the next morning for my check.
• Total time: approx 78 hrs

Now, here is the experience with the other dealer:

• Wed 8am: I send email to D2 saying I refused the deal from D1, and is the car you quoted me still available?  I express interest in the one that is a small step down, lesser sound system but mostly the same.
• Wed 9am: D2 emails me back, they have it, but only in white.  They can check on other colors.
• Wed 11am: I drive over to D2, still in D1's loaner car, and he collects my credit/loan/insurance info, and starts checking on color choices from other cars in the area.
• Wed 11:30am: I say I need to go take care of something, I'll be back.  I drive back to D1, get my $4000 check, and D1 finds someone to drive me back to D2 so they can have their loaner car back.  (D1's loaner car now has 520 miles… oops.  Well I did say I needed to take a trip on Sunday.)
• Wed 12pm: I return to D2, he has found several cars in the system but needs the other dealers to call him back.
• Wed 12:15: Dublin calling, they have it in silver.  D2 sends the driver off with the white car so he can return with the silver one.
• Wed 1pm: Paperwork is all done.  I opted for the extended warranty which I refused from D1 at $2900, but D2 offered it to me for $1900, now we'll have 7 yrs instead of 3 yrs warranty.  D2 drives me back to my work.
• Wed 615pm: D2 has the car and shows up at my work with it.  I drive D2 back to his own office and he gives me tips on the way. 
• Total time: less than 12 hours.

What I did right and I'm proud of:

• I prepared well by doing my research.  I spent lots of time getting quotes, not just for Passat, but for Camry, Sonata, and Accord.  Internet quotes really do make it much, much easier.
• After deciding what I wanted to do, I stuck to my guns.  Once I got the feeling that I didn't trust dealer D1, I got out of the deal and didn't allow myself to get bullied into dealing with them.
• I didn't lose my cool.  I told them I was upset because I felt like I had been lied to, and that I had decided not to deal with them, and I didn't raise my voice or call them names.

What I am not proud of here:

• I settled for a higher price (by 460) for the car and for a lower price (by at least 1000) for my trade-in.  I told myself before going that if the guy didn't meet my best price, or didn't give me fair value for my trade-in, I should walk away.  I didn't… I allowed myself to get sucked into the "just want to get it done with" trap.  News flash: Car dealers don't have your best interests at heart, at least not at #1 on their agenda.  Once I started playing the "write down a number and I'll go talk to my manager" game, it was a slippery slope and I lost control.  I knew this could/might happen and should have walked away at two different points, but I didn't.
• I should have told them Tuesday *morning* that I didn't want to complete the deal.  I should *not* have said, "OK, have it here by 6 and we're good" if I wasn't 100% willing to stick with that.  I owned up to this failure, and apologized for changing my mind.  I said yes, I know we had an understanding, and I changed my mind, and I'm sorry but I'm no longer willing to deal.  If I had instead pulled the plug in the morning, it would have been simply their mistake.  They paid some extra to have the car brought from Benicia to Santa Clara, for which they take a loss.
• But, what is even worse, I did not check with Michelle before doing this.  I should have told her what I was planning and given her a chance to talk it over with me first.  We are supposed to check in with each other before making important decisions, and I didn't… I failed.

But, after all that, we have a new car, and I feel like it was a success, if a somewhat qualified one.  I feel happy that I have my car and that D2 will get the commission.  I feel badly for D1, but I don't feel too badly because they will make a tidy profit on our trade-in.