Volvo: Possible pending turbo failure?, worst case scenario, volvo s70

Question
Hello,

I purchased a 1998 Volvo S70 T5 a year ago.  I absolutely love the car.  9 months after I purchased it the timing belt went out prematurely and destroyed the engine.  While a new engine was being put in the mechanic noted that my turbo had alot of play in it and that it had a possibility of failing within a year.

My question is entirely turbo related; I have noticed various things that have struck me as abnormal and in some cases certainly afoul.

They are:
1.  Ever since I have owned the car, turbo lag from a stop has increased by a good amount.
2.  The sound of the turbo has certainly changed at idle, I almost hear a hissing sound which is very similar to the sound of the turbo spooling which I never used to hear quite like this.
3.  Tonight I heard low frequency thunks coming from my drivers side front at stop lights, also very unusual for this car.
4.  After the car was warm, it was shutdown for 20 minutes, restarted.  As I was driving away it felt like the turbo completly stopped spinning momentarily.  My throttle was surging, my turbo spool sound seemed to stop and I seemingly had no power.  This lasted at most 3 seconds but it is certainly not standard.

All of my fluid levels are perfect and I run synthetic with a Volvo oil filter etc.  Could these symptoms be turbo related, and if so what is the worst case scenario if I were driving and it failed; what is wrong with my turbo and will it destroy my engine or cause fluid loss?  Also, what is the importance of idling a turbo engine after highway or high spooled driving, which I have always done for the car?

I am sorry for the vague, broad sweeping list of symptoms and appreciate your time.

Regards,

 -  Jesse

Answer
Jesse,
If there is alot of noise in the turbo that is certainly wear and tear. Having it rebuilt is a good idea. Sometimes noise from the turbo or seems like the turbo is the plumbing. If a intercooler hose has a leak in it and you are accelerating you will hear some noise. The intercooler could also leak.
Clunking noise I can say, that is something that needs to happen as someone drives and listens then looks for the noise/problem.
The worst I have seen a turbo is it locked up and the car would barely move. Leaks yes the turbos have coolant and oil going to them. My feeling is when coming off the H/way you are bound to drive slowly for a while before stopping and is enough time to slow and cool the turbo. I have two turbo cars and one was used H/way everyday, and just getting off H/way and slowing to in town speeds was enough for 15 yesrs. I have since had the turbo rebuilt.