Saab: Saab 9-5 white smoke and grinding noise, head gaskets, combustion chamber

Question
Hi Jerry,
I have a saab 9-5 which recently started to blow white smoke with a slight loss of acceleration power. I drove it home (app. 30miles) and it seemed to be ok. To be safe i had a mechanic do a compression test and the outcome showed no signs of headgasket failure. The next day on the way to the garage the white smoke got so bad and was now accompanied by a grinding noise, that we had to turn around and park the car. The turbo is less than a year old, the coolant and oil levels are fine. I'm at a loss here and don't know if is should either get the car fixed or if it'll be cheaper to scrap it. Can you help and give me a pointer as to what might be wrong with it? Thanks Marco

Answer
Marco:
  I am sorry, but as noted in my profile, my hands on experience is limited to the older (pre 1993) non-turbo SAABS. I suspect you have a bad turbo, despite it age. Also, sometimes bad head gaskets that allow water to escape into the combustion chamber may still show good compression. The white smoke is almost always caused by cooling water somehow.
  Sorry that I could not be of more help,
         Jerry