1- The turbo behavior sounds more or less normal. If the bearings were shot, you would have a lot of play in the shaft. It's harder to tell if the oil seals are shot though.
2- A film of oil in the intake is normal, even with a good/new turbo. There's even a MB service bulletin that states this is normal and that MB will not do warranty work to attempt to "cure" what isn't a problem. A small amount may be present from the crankcase vent tube, at the intake elbow, but you shouldn't have big puddles or anything in there. If so... I dunno, either the pressure valve in the valve cover is stuck open, or you have an internal failure (not likely.)
3- The oil light can be misleading. There is a timer circuit in the dash that is supposed to delay the light turning on for 60 seconds after the sender trips it. After 15 years, the capacitors in the circuit dry up, resulting in false signals. You can test it by grounding the sender and timing how long it takes for the dash light to come on... I bet it's way less than 60 seconds.
4- If your coolant tank was original, it's just as well it broke... the plastic gets brittle from the heat. On the W124 models, there is a new tank with a silica gel pack inside to control corrosion due to the aluminum head & radiator. I assume the same is true for your W126.
5- 1400 miles per quart is a little high. My one car was getting 7500 miles per quart (before the new head), my other car is at something like 4000-5000 miles per quart (both with Delvac-1). Tip: DO NOT add to the "Full" mark. That is a maximum level, NOT a recommended level! The optimum for low oil consumption is between the two marks. Don't add until it actually reaches the "add" mark on the dipstick, as measured in the morning after sitting overnight (especially if you use synthetic, which actually does take hours to fully drain back to the pan).
6- I'd suspect possibly your turbo internal oil seals, especially if you have the Garrett turbo (with the rubber hose to the wastegate). Mine leaks externally pretty bad. Otherwise... maybe valve guide seals? It's hard to tell w/o more symptoms (any blue smoke at any time... under load, after a long time idling, etc?)
7- My car with the new head, that used to get 7500 miles per quart, suddenly started ingesting oil with the new head. I am REALLY ticked off about that. I suspect either the valve seals are installed backwards (intake on exh & vice-versa), or the machine shop screwed up the valve guides when they assembled it. Now it sucks oil past the guides at idle, and after idling for 30+ seconds, it blows a blue cloud when you accellerate. Oil consumption dropped to something like 4000 miles per quart (not sure exactly). I plan to yank the cam & inspect the (new!) seals, if they are OK, the head has to come off AGAIN! Aaaagh!
Best regards,