I think it is the turbo. You most likely have a wheel rubbing the housing. Pull a good one from a junk yard and rebuild it. It's not that difficult. Get a rebuild kit with the most parts you can find. Some don't include all the heat shields or oil distributor plate, etc.

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1991 F250 super-cab 7.3 IDI. (rebuilt by me) Banks Sidewinder turbo, hydroboost brakes, new IP and injectors.
2003 S430 - 107K
1983 300SD - Tanoshii - mostly restored ~400K+.
1983 300SD - Good interior. Engine finally tamed ~250K.
Monark Nozzle Install Video - http://tinyurl.com/ptd2tge