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1. the wig like material is the contents of you rear most muffler.
2. turbos HATE any sort of exhaust restriction. that said all the crap from the muffler clogged the air way so much you turbo could not in effect breath out the gases.
glowing red hot may or may not have smoked your turbo seals and bearings. stopping as you did likely saved you from total turbo failure. the only thing you can not do is get rid of that muffler asap, i would change the oil asap and filter as well and run it to find out.
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