This may not be it, but I know my sister was having this same problem in her 08 Cayenne and we struggled and the dealer struggled to get it all the way down, but there were TWO buttons. The obvious one on the side of the headrest itself, and then another on on the base of one of the metal posts that needed to me pressed to put it ALL the way down (It blended in with the lip of the entry into the seat). I know these are two different brands, but maybe it's a German thing?
EDIT: Here's the picture from the Owner's Manual. It was as I suspected!!