Turbos generally don't leak oil externally except at the oil supply and drain lines. Most oil leaks are internal and show up as oil in the intake and blue exhaust smoke.

The soot and heat are probably from a bad seal at the exhaust side of the turbo at the exhaust pipe. Could also be a leaking EGR valve (between the intake and exhaust). The seal on the operating shaft can go bad and leak soot and exhaust.

Replace the EGR if it is leaking exhaust -- there are carbon monoxide issues as well as soot, and disconnecting it won't fix the leak.

Lack of turbo whine is usually a sign of bad bearings -- take the intake hose off ENGINE STOPPED, PLEASE and try to spin the turbo wheel by hand. It should turn with a small amount of resistance and spin a turn or so if you twist it hard. No axial play, a small amount of side-to-side play, no rough spots in rotation. Oil on the wheel and not in the blowby tube means the seals in the turbo are shot, and need replaced.

Typical bearing/seal replacement without major work is about $400 here in Indiana, "cartridge" replacement (boring out the body and putting in an insert because the bearings were too far gone) is about $750, new turbo about $1200.

Overflow lines will need to be replaced on a regular basis -- mine go about three years. Some of the fuel leaks out around the spring holder in the injector (2000 psi and almost anything will leak!) and is drained off down the lines, along with the excess fuel from the IP. If they are wet, you are losing quite a bit of fuel -- you won't see in on the grounds as it evaporates off the engine.

Peter

__________________
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!