In plain terms this code (P0421) indicates the Catalytic converter is worn out and is no longer cleaning up the exhaust enough to pass the computers internal self testing that goes on all the time while the engine is running and hot, as to the exhaust leak, yes that could have set the code, what I would do at this point is clear the code and see what happens,there is a slight chance that the cat monitor (looks like an O2 sensor) located to the rear of the catalytic converter is not functioning properly, but that is seldom the cause. So clear the code and drive it for a week, if the code doesn't reset u are done, if it does the cat will need replacing.
I found codes on VW's however,there is a defined one for P0420 and P0422. !@@#$ However here is a link for the breakdown of the code.
P is power train.P0 is some government required code.And the 4 relates to additional emission control.
http://www.bentleypublishers.com/tech/vw/vw.dtc.table.htm
Here is a link that will hopefully reset the system.A neighbor had to do something similar to this to eliminate a problem.It happened when he disconnected the battery.
http://www.troublecodes.net/VW/
Also just for your information,there are so many little things that could cause a check engine light to come on,just make sure you have water,oil and fluids unless it is an issue where you live due to vehicle inspection.Good luck and please reply if you have problems or if you just want to say it worked.It kind of looks like on the sites that they are pushing you to buy their diagnostic tool.Some auto parts stores will run a free computer check too.Just call around and ask.Autozone does it if it is in your state.
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