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I'll take a stab at some of this...
Your wagon should definitely have a live axle (not IRS, like the SE sedan), but it may have Nivomats, like a 960 wagon. Take a look behind one of the rear wheels... here's what a wagon Nivomat looks like:

If it has a metal sleeve in place of the bellows, then it should be a regular shock... perhaps the PO ditched the Nivos. It is possible to replace the wagon Nivomats with standard shocks, but IIRC you need to replace the rear springs, too. Check the FAQ for more info on that.
Steering... can't help you... check the FAQ, or hopefully more people will have suggestions.
For your oil problem... how 'bout some more info:
+ what type of oil are you using, and how often do you change it?
+ does the oil light just come on under certain conditions (ie hot idle), or is it random?
+ any driveability problems? decrease in power? turbo spool up as quickly as it used to?
Things like a blocked exhaust or a plugged turbo oil drain line could cause some problems. Excessive blowby past the rings is another possibility...
- Brian '93 945T
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