Check the overboost protection circuit and the turbo's wastegate. If the wastegate ceases to function, the overboost protection circuit will remove boost from the ALDA, and you will lose power. Soon after fuel is cut, the boost drops below the 16 psi overboost limit, the protection circuit restores boost to the ALDA, power and boost increase, and the scenario repeats itself in this "surging" manner.

Symptoms of overboost protection include power surging when you're heavy on the Go Pedal and boost fluctuating between ~8 PSI and 16 PSI (this can be verified with a boost gauge).

Nice car! Good luck getting it working properly again.