Plugged exhaust? I've seen it happen, worth investigating. Look over your exhaust manifold and turbo piping carefully to see if there is a port or plug you can temporarily open up, to avoid the pain of pulling the exhaust pipe off the turbo.

Low exhaust flow would account for both the glowing red turbo and the loss of power (too much back-pressure).

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Respectfully,
/s/
M. Dillon
'87 124.193 (300TD) "White Whale", ~392k miles, 3.5l IP fitted
'95 124.131 (E300) "Sapphire", 380k miles
'73 Balboa 20 "Sanctification"
Charleston SC