Good idea with the balloon test, creative.

The Catalytic converter is about 5 or 6 feet down the exhaust pipe from the turbo. A hexagonal unit about a foot long itself. Approx under the passenger seat floorboard.

The best way to test, since you have things apart, is to disconnect the down pipe right at the rear of the turbo. Then perform your balloon test again. If it pops off quickly like the other car, building up boost, then the Cat is clogging. It can create enough back pressure to keep the turbo from generating stock max boost 12-14psi.

Check this first to save you from pulling the turbo if not needed. If no change, then the problem is in the turbo itself.

You can also test the wastegate with everything still installed, apply pressure to the control pod, look for the rod at the rear to the Wastegate for movement, or grab the rod or wastegate end and see if you can move it. You can also hit it with penetrating oil.

Hopefully this will get you going. These turbos are very simple, no variable vanes or anything, just a simple finned exhaust wheel and impeller wheel on a shaft. It would take some serious damage to either for them not to move air. My guess is the exhaust restriction. Your car can still run fine at say 30% flow, but your boost and overall power will be limited and doggy at less than full flow.

You mentioned that it is a used turbo. How long have you had it on the car? Any problem after first installing? Was it weak on power right after installation?