Transmission of a Gaussian source over a time-varying Gaussian channel is studied in the presence of time-varying correlated side information at the receiver. A block fading model is considered for both the channel and the side information, whose states are assumed to be known only at the receiver. The optimality of separate source and channel coding in terms of average end-to-end distortion is shown when the channel is static while the side information state follows a discrete or a continuous and quasiconcave distribution. When both the channel and side information states are time-varying, separate source and channel coding is suboptimal in general. A partially informed encoder lower bound is studied by providing the channel state information to the encoder. Several achievable transmission schemes are proposed based on uncoded transmission, separate source and channel coding, joint decoding as well as hybrid digital-analog transmission. Uncoded transmission is shown to be optimal for a class of continuous and quasiconcave side information state distributions, while the channel gain may have an arbitrary distribution. To the best of our knowledge, this is the first example in which the uncoded transmission achieves the optimal performance thanks to the time-varying nature of the states, while it is suboptimal in the static version of the same problem. Then, the optimal \emph{distortion exponent}, that quantifies the exponential decay rate of the expected distortion in the high SNR regime, is characterized for Nakagami distributed channel and side information states, and it is shown to be achieved by hybrid digital-analog and joint decoding schemes in certain cases, illustrating the suboptimality of pure digital or analog transmission in general.