My 1.6 td was belching out significant amounts of smoke, which when cold was bellows of white clouds and when it had warmed up went blue. Upon inspecting the exhaust and tail gate there was splatterings of oil everywhere and you could actually see oil coming through the joins on the exhaust.
Decided to take it to a local garage in Aylesbury who said it was most likely the Turbo but weren't interested in doing it as they were worried about seized bolts etc!!! (I suppose the young "facebook generation" mechanics of today only get taught to plug an engine into a PC to tell them what is wrong.)
I removed the turbo and noticed that the inlet and exhaust outlet were covered in oil every where, this is what it looked like after a bit of cleaning up. You can still see oil in the exhaust outlet and the air intake. There was quite a bit of play in the turbine shaft that almost touched the housing.

Since I have gone this far I decided that rather than pay £300+ for a recon KKK K14 turbo I was going to recondition it myself with one of these kits from Turbo Rebuild for only £49.99 for a kkk k14 Service repair rebuild kit
http://www.turborebuild.co.uk/?p=product&key=0806306790" onclick="window.open(this.href);return false; I know the turbo might need to be balanced and was going to find somewhere local to do it.
After stripping the KKK K14 Turbo I found oil and caked oil everywhere.


Once I was able to remove the Turbine shaft I could see what I think is the cause of oil leaking into the exhaust (not sure if this would also force oil into the inlet manifold as well?) The shaft and been ground down by a milometre or 2, which the photo doesn't show but I have highlighted in red.

Although Turbo Rebuild see the K14 turbine shaft for £89.99 http://www.turborebuild.co.uk/?p=product&key=0806302769" onclick="window.open(this.href);return false; they are sold out and I could not find any others online for love nor money. I've managed to find a brand new one turbo online which looks like it is a JP Group ais turbo, it was £475 and I still get to keep my old one.

While waiting for the turbo to arrive I decided to investigate the engine further and found oil everywhere in the turbo inlet manifold.

After removing it I found more oil, is this normal?

I removed the cam belt cover and rocker cover and there appeared to be oil leaking from the corner of the rocker cover, not sure if this would be the gasket or the redish/orange thing on the end?

Has any one got any suggestions or advice? I am pretty certain I needed a new turbo anyway . What I am not sure on is that the engine might have caused the turbo to fail in the first place and the oil in the inlet manifold. Is there anything I can do to check the engine in the mean time? I have looked and there is no white sludge or oil in the coolant to indicate head gasket or anything.