My son is driving an 87 740GLE turbo wagon that I purchased as a first car for him. It was in rough shape after sitting in a tow yard for over a year. Initially it was getting 24 mpg but the turbo was not working. I found a loose rod or something underneath the turbo and connected it which activated the turbo. The fuel economy dropped immediately to 15-16 mpg and there was a loud roar from the manifold. I have looked for vacum leaks and can't find any. The fuel economy drop was dramatic and followed the connection of the turbo. Thanks in advance for any suggestions. My son does not have a lead foot and his driving habits did not change.

I believe this is the wastegate actuating rod that diverts turbo drive exhaust if the pressure gets too high. The rod could be missadjusted and the wrong length or the wastegate valve could be bad. It may have been disconnected for a reason??? Missadjusted rods can be bad for your engine. Do you develope any boost when you try to use the turbo?

Yes there is some boost from the turbo. I will check the hoses but it doesn't appear that there is any vacuum leaks. Thanks for the reply

Check all the Turbo hoses between the air intake and the throttle plate very carefully (ie. remove and inspect). With positive pressure from the turbo, a leak in these lines can cause the engine to run extremely rich, resulting in poor fuel mileage. You should also check the sparkplugs as they will probably be sooty and fouled. New hoses aren't cheap especially from a dealer but FCP is not too bad price and quality wise.Of course turbo usage will result in increased fuel consumption but yours seems a bit extreme.