I appreciate any input! even if its not a solution. Hopefully someone here has a little insight to this problem. When you had your turbo out, did you check your drain tube for a blockage. I replaced mine with the upgraded tube. It didn't solve it but it did seem to slow the amount of oil coming thru the turbo.

@lenzhotrod
the seals in the turbo aren't meant to stop the oil from leaking thru, they are for the exhaust gases. Whats happening is for some reason the turbo is filling up with oil and not draining fast enough back into the crank case. Ive got a rebuilt turbo here and just had it checked out at the rebuilders, the seals aren't the problem. There is something else wrong with this motor and I cant find the cause. Thanks for your feedback!

@avatardvr when I had the turbo out I did not specifically check the drain tube for blockages, though I have significant doubts about the likelihood of anything blocking that tube (mine is the updated variety). I followed torque specs to a T on every bolt inside and outside of the turbo and all of the clamps, but something somewhere is not happy with me. Afraid I will be pulling the turbo to inspect in the next few days. If I find anything that might help you I will make sure I let you know.

@smoran22
I seriously appreciate that! Something I read re: these vgt turbos is the tabs that hold the vanes, check them for wear. that wont have anything to do with the oil puking thru but if they are wore down, maybe that's the cause of your turbo hunting. As for the blockage I agree, there was nothing wrong with the old drain I pulled out but the new one was significantly larger and seemed to make a minor difference. (not that it matters lol, any oil coming thru the turbo is too much.) Good Luck! let me know how it goes.

So the seals prevent the exhaust gases from getting into the oil??

Not sure if you ever figured your issue out..... but I have been a heavy duty diesel mechanic for 10 years and one of the main causes I have seen for the problem you're having is a boost leak. I would bet you have a leak in your intercooler or piping.
Good luck!

Figured part of it out
 

So as it turns out, when I cleaned the turbo, I neglected a few areas. The groove where the oil seal rests in the housing had a few spots of crud I missed, and the oil drain passage right behind that was totally blocked. It's really hard to explain how to find that passage, but i'll try...

If you look from the compressor side in toward the turbine, as far back as you can see, that needs to be spotless. If there's any crap there at all, get it out. Go at it from whatever angle you need to but remember this, If you look through the turbine shaft opening on the exhaust side down towards the drain port, and shine a flashlight up through the drain port, you should see all sorts of light. If you don't, keep digging. That was the case with mine. Once I got all the crap outta there, she runs like a top and doesn't smoke and stink anymore. :jump:

That may not be the case for everyone though. If I can remember later, i'll post the few pictures I have of what mine looked like before I cleaned 'er out.

[EDIT]
As for my surging issue, After I did a VGT Relearn, it was still happening, but I caught the MAP sensor bouncing all over the place. I replaced the MAP sensor and that took care of that...

So, I should have replied to this a while back my appologies. Turns out Heavyassault had it all along. After much back and forth with the turbo rebuilder, they gave me another one and issue is solved.

Oil in exhaust
 

(Did you figure out want was your problem with oil coming out of the exhaust?)