My offside headlight has suddenly started to point quite close to the front of the car, whereas the nearside still projects a few metres in front.
Am I correct in assuming the S has self leveling headlights and that this could be the cause of my problem?

 

I get loads of problems with the supposedly self levelling on the Audi S3. If you get a problem try switching the ignition complelty off and back on again, this may reset the self levelling thingy. Works on the Audi, but I have never been convinced that the S2k's actually work!

 

You are correct in that the S has self levelling headlights. There is a sensor that measures the angle/height between the lower wishbone and the rear sub-frame on the rear nearside. This is checked every 30 seconds (i think), and the headlight angle is adjusted accordingly. Each headlight has an independent motor to adjust the angle, so my guess either there is a bad connection to your offside headlight or the adjustment motor is broken. If it was the sensor then both headlights would be at the wrong angle.

Not sure if it will reset if you turn the ignition off and then back on.