I've been dealing with the problem since last summer (2012), but I have a little car that I drive so the truck wasn't really top priority.

The car died. Need the truck. And the problem is worse than ever.

It started on long trips, 60+ miles, I would notice loss of power. Now it's more like 20 miles, I think.

About 3 weeks ago a mechanic friend (he doesn't know much about diesels) noticed that the clamp on the hose from the air filter to the turbo was missing, so he put one on. Then the truck wouldn't start, even though the engine was warm. We opened the air filter housing and saw that the filter was filthy. Since we were at the auto parts store, we replaced it. It still wouldn't start. Then I popped the clamps, so air was bypassing the filter and letting a bit of air in. It started.

Since then, I've been using the air filter clamps like a "choke" so to speak. There seems to be no rhyme or reason on how this choke works. When the engine is cold, it might require that I open OR close the clamps to get it to start.

But that's not the worse problem. The fact that it loses power as the temp climbs is what I'm afraid of. I'm afraid that the temp gauge is not reading accurately because it's not really showing very hot. It only climbs ONE NOTCH (from the second notch to the third - what ever that means).

I always pull over and let it cool down because I'm so scared of what comes next. The engine compartment is obviously much hotter than it used to be, last year before this problem started.

Oh yeah, I also drive around with the hood popped so that air is coming in under the hood. Also, I will turn off the truck and just coast for a few seconds on hills, this helps cool it and restores power pretty fast. It's a crazy way to live though! Power steering and power brakes are gone when the engine is off so that's scary.

Before I noticed that it was temperature related, it had gotten to the point where it wouldn't go much over 25 mph after driving for a distance. Now, I don't let it lose power that way because I'm too worried about the damage. I can actually drive it without losing power if I pull over before the temp gauge hits the third notch -- about every 10 miles.

I did the paperclip thing and got a code 12. No help there.
I pulled the new air filter out to look at it. There was one bumble bee stuck to the back so that indicates that some air is flowing through it right? I stuck my hand in the hole behind it and didn't feel any obstructions. Then I stuck my hand in the other hose, toward the turbo and I spun the turbine a bit, it turned.

I'm not a mechanic but I'm hoping that with some clues, you guys can direct my mechanic friend in the right direction. He's young but he's very good, just not experienced with turbos.

Oh, the coolant overflow was bone dry. I added water and it has helped a bit, but not very much. There is a tiny leak somewhere in the radiator or hoses because it does drip on the driveway.

That's all the clues I can think of right now. Please help!