I re-did my teak this past fall. I went a little beyond the 80 grit, but not so far as to use the 2000 grit and pledge. The previous owner of my boat looked to be pretty abusive on the teak, and it took a lot of sanding with an orbital and 80 grit to get all the gouges out. I then hit it with some 120, then 220 to get the orbital marks out, but not make it too slippery when it was all said and done. I also re-did the radius on the edges of the deck with a router, as there were gouges there too. Then I put a couple of coats of teak oil on, and it looks like new.
If I were you, I'd sand it down enough to do away with the flaking waterproofing and or gouges in the wood. Just remember not to let the sander sit in one area for too long, or your wood will become uneven. Stay away from the waterproofer once you are done. Just use the teak oil a few times a season. I tend to reapply a LIGHT coat after each day/weekend on the water, just because I like to keep it looking new and hide and scuffs from use.