Thank you for everyone's helpful suggestions.

I took it to my local indy and he removed the turbo, sent it to a shop in Salt Lake City where it was remanufactured for $850. It looks like a new turbo.

I got the car back yesterday, total bill, $1350.

It runs correctly now, and after a 5-mile Italian tuneup, it burned out the oil in the exhaust system and it doesn't smoke any more.

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1st MBz: 1982 300SD
2nd MBz: 1987 300SDL
3rd MBz: 1995 S420
4th MBz: 1987 190DT
5th MBz: 1984 300SD w/1983 300DT engine
6th MBz: 1999 C230k I'm 3rd owner, got it w/57,235 miles.
and manages Mom's 2007 R320 CDI