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Welcome! IMHO, once you are sure the motor is sound, I'd go with a water cooled turbo if at all possible. It'll have a much longer life. There is another thing that I've noticed with my '88 764. I seem to get heat from the heater really quick. I believe that this is because the turbo is helping to bring the coolant up to temp sooner. Thi smight not be the case, but it makes sense to me... I'd get th ecar running perfectly, and make sure your compression is good, all of your oil seals are good, etc... before you even THINK about dialing in more boost. Keep in mind you'll need higher octane fuel. 93 is a good place to start...
Have fun!
Mark
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