The oil supply fuinction is completely separate from the turbine action (impeller and compressor). A leak in the oil return would not affect turbo performance, though a leak in the oil supply might. But if you had a supply problem, you'd have oil everywhere as the oil supply is under pressure.

Lag is normal, especially from a standing start. Some of this is native to the way a turbo works...it takes time for the turbine to spin up and then compress 6 feet of ductwork. In addition, late model Volvos have ECU management of wastegate operations, and for the purpose of reducing wear and tear on tires, transmission parts, etc, the ECU will instruct the turbo to hold back a little. You can get an instant spike if you're going 50mph, say, and jump out to pass a truck. But expect a little lag when pulling out in an intersection.

You can bypass the ECU with a $35 manual boost controller, which will allow you to idle the turbo at higher rpm and eliminate ECU interference. But you will be running a hotter turbo in an environment like the late-80's Volvos, which usually needed a turbo rebuild every 135K miles. Your current turbo set up will last much longer....with regular oil changes, of course.
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David
98 S70 T5SE // Black, misc mods (mostly lighting), red calipers
92 940GLE // Hella Micro DE foglights