Volvo Repair: Bad turbo?, s70 glt, burning oil

Question
I have a 1998 S70 GLT with 190,000 miles.  In the morning I drive the car about 200 yards or so to where I feed a pet and then continue on to work. While I feed the pet I leave the car running and I would often hear what I thought to be the turbo winding up for a few seconds and then winding down again. This sound was also evident occasionally at a trafic light or in a parking lot.  In reading about Volvo turbos this seemed to be normal.  About a year ago the car developed a leak from the rear main seal.  I had  the seal replaced at a local garage.  They also replaced the seals in the turbo as per the suggestion of the dealer from whom the parts were ordered.  A short time later I noticed the whine of the assumed turbo began decreasing in pitch accompanied by an increasing bad bearing noise.  Some time around here the check engine light went on.  The car however seemed to run fine.  As the bearings degraded I began to smell burning oil.  The smell would come and go.  Sometimes it was pretty bad and other times there was no smell at all.  Eventually the RPM of what I thought was the turbo dropped very low and then stopped.  It was at this point that I noticed that when the turbo would whine in the past the lights would now dim as if the unit was electrically powered and the stopped rotor was causing and extremely high load to be applied to the electrical system. The coming and going of the burning oil smell continued.  A couple of days ago when I checked the oil level I found what appeared to be water in the dip stick tube.  It had the appearance of mud.  I couldn't be sure if the oil was truly mixed with water or if there was condensation in the dip stck tube enough to cause this.  Once I found this condition I no longer drove the car.  This weekend I will have the chance to drain the oil and see what the story is.  My questions are: Is what I describe indicative of a turbo having gone bad?  Why do the lights dim?  Does the turbo have a coolant supply?  If it is a bad turbo, would you recommend replacing the entire unit or is using a cartridge sufficent?  And lastly, if it is a bad turbo why does it seem to run so well?  Thanks for any help you can give me.

Answer
It does sound like a turbo problem.  It sounds like the internal seals inside the turbo have gone bad.  What happens is the oil return lines get blocked and leaky.  If left alone the oil will back up into the turbo and blow out the seals.  Since oil flow is decreased the oil stays in there too long and ends up cooking.  It also has coolant flowing through it for cooling purposes.  It sounds like a leak has developed between the coolant and the oil.  Could be from the turbo or the oil cooler.  Those are the only 2 systems that have oil and coolant together.  One check you may want to do is to pull the boost pipe off of the top of the turbo and look inside the turbo.  If you see oil in there, then it is DEFINITLY bad.  If not it can still be bad but it's most likely alright.  Find where the oil contamination came from and if its the oil cooler than I think you're turbo may end up being alright.  The electrical issue is seperat though.  There is no electrical connection to the turbo what so ever and increased turbo resistance doesn't increase engine load.  You may have a bad battery or alternator.  If the turbo is bad replace the whole thing.  Its not worth the time to rebuild it (if it is even able to be rebuilt).  It will run reasonably well until the oil has damaged the bearing surfaces in the turbo to the point that it has resistive spinning.  Then you will see reduced power under heavy boost.  Normal light driving you won;t see a diference.  Hope that helps.

James