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I hear that these turbos are very easy to rebuild. Around here the kit cost's only $50. Also, I believe a turbo engine can't (or won't) allow oil to get into the intake ports through the valve stem seals, because of the pressure in the manifold and intake tract. If anything, bad seals will cause more crankcase pressure from turbo boost getting through the seals and into the crankcase. However, it is a possibility that said crankcase pressure could force oil through bad exhaust stem seals and into the turbo and out the exhaust pipe. More likely in your case would just as you think: bad turbo seals. On my Mitsubishi, it had turbo seals (and bearings) so bad, that at idle it would produce a large blue cloud of smoke. After accelerating, the exhaust cleaned up. The oil pressure is higher than the boost pressure at idle, so the bad seals/bearings allowed much oil in the cold side of the turbo. After accelerating, there was enough boost pressure to hold back the majority of the oil that was meant to lubricate the bearings. I can only assume that the excess oil got into the hot side and out the tail pipe (same as in your case), as the entire back of my truck was oiled up until I replaced the turbo......Rich
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