I do agree that after 1997 production will be minimal at best (perhaps a tech or two from a bombed factory salvaged enough equipment to produce a case a week), but up until mid to late 1997, hundreds of thousands of rounds would be produced in muliple locations every week. Some small stocks of ammunition would still exist though even in 2000, however these are likely to be in rear areas and closely hoarded - you won't see very much released for use on the front lines!
I see the east german forces retaining the weapons they had prior to reunification in the V1.0 timeline. There just isn't the time or facilities available to completely re-arm them on much more than an individual basis. As the war drags on though a mix of weapons are likely to be picked up as in other units of other nationalities, however the vast majority of troops will still be armed with the same weapons they started out with (or replaced with something similar).
In addition to a lack of available weapons to issue to the DDR, there's the training problem to overcome - a G3, G41, etc is a different animal to an AK and muscle memory takes time to develop. Also, I believe the tactics of the east Germans was somewhat different to the west and the issued weapons were designed with this in mind.
Effectively you'd have to retrain the DDR troops in virtually everything, not just weapon handling - this takes time which wasn't available in V1.0.
V2.x on the other hand with it's much earlier reunification makes retaining an easier task to accomplish.
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If it moves, shoot it, if not push it, if it still doesn't move, use explosives.
Nothing happens in isolation - it's called "the butterfly effect"
Mors ante pudorem
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