My wife brought the 740 turbo home yesterday belching white smoke. Smelled like antifreeze too. However, when I checked the oil it looked clean (I figured a blown head gasket or worse). As I looked around the car, it appeared the turbo was leaking oil pretty bad. Can a failed turbo (seal?) dump water or is my first inclination correct (head or head gasket)?

Brad

First thing is a compression check! That will give you indication of head gasket/rings/valves. Next place to look is the turbo. When you say it is leaking - where is it leaking - outside the casing? Or into the intake or exhaust? Drain your intercooler (plastic plug on bottom left side of I/C) and see how much oil comes out. Any evidence of antifreeze in this fluid? If yo only get a couple of tablespoons or less, there is no problem with the turbo front end seals. 1/2 cup or more and replace turbo.

Remove intake hose from front end of turbo - reach in with your fingers and twirl the shaft - it should spin freely and smoothly. Then move shaft L/R, up/down, in/out - there can be perceptable movement, but in no case should the rotor touch the casing at any of the extremes.

Any sign of A/F residue in the exhaust housing of the turbo?

Generally, the only way the turbo can leak A/F is if the center section housing is cracked - and then there is a good possibility that the A/F can get into the oil. Open the oil filler cap and look for any milky whitish or brown residue - check dipstick also - these are indications of water in the oil. Also check the coolant overflow reservoir for evidence of oil in the water - brown scum on top of the water.

My guess is a warped head - possibly from an overheating incident - or a simple blown head gasket. If head is warped (you will need to have it measured) be sure to check the deck of the block also - they may both need to be cleaned up - if either is damaged close to limits or beyond, the best solution is to replace the engine with a quality used one - look for one from 88 - 91. You will need to use your old manifolds, sensors, disto, and accessories, though you can use the later injectors provided you use the later fuel pressure regulator as well.

Replacement engine (less than 50K miles) complete with manifolds, turbo, injectors, sensors, but without accessories (A/C, P/S, Alt) should cost in the neighborhood of $900 to $1500 plus labor - this is usually cheaper than complete rebuild - particularly if you need to replace the head on the old engine. The later engine is also the stronger engine (better bearings and rods).