Yep, unfortunately this in an interference motor. 98+% you have bent valves at this point and the cylinder head will need to come off the car.
Sad situation, you could have spent $600-$700 for a timing belt, tensioner, water pump, thermostat and belts and you could still be driving the car. But now you are probably looking at least 3 times this amount.
Sorry to say, the car is 12 years old, not likely worth spending more money on it, sell it as is and move on.
If you want another New Beetle, get a 2.5l which does not have a timing belt, or expect to replace the timing belt on a new/used Beetle with a 1.8t or 2.0l unless there is absolute proof the timing belt was changed.
Sorry to hear about the bad news.
Good luck with moving forward.