The rear main seal leak should not get to the turbo at all. It is located at the "back" of the engine where the transmission attaches, this is on the driver's side. It is time consuming to replace the $30 seal, because the trans must be removed, and usually takes a good shop about 5 hours of labor. So that's about 400-600 dollars, plus garage stuff, the seal, so about 800 total should do it.

I would get quotes from other places. You could probably get a new trans for that price, but you don't need it.

As for your low mileage, I would check the simple stuff - like said before, hoses loose or cracked, like the flex intake hose, a clean air filter, too.

I would also check this board for "low mpg" and see what's there. I have not had this experience personally, so I can't provide specific help.

I presume you've check the codes and there is no CEL?

I would get the rear main seal fixed first, then try to isolate the MPG problem. I don't know if the oil from the engine could impact the trans, like oil on a clutch could. Only a drop can cause problems, even fingerprints from what I have heard.

First, find a better garage. A rebuilt turbo goes for around $350-400. They are fairly easy to R&R, less than 3 hours if I remember correctly. A dealer will charge you a lot more because they only deal in new parts, which you do not need on a 1994 car.
My 1998 V70 also "leaks" a little oil from the weep hole under the heat exchanger (radiator), indicating a wearing seal on the turbo. I am not going to get it fixed for a long time. The oil drips out whenever the boost is on, and collects on the splash pan. Then the oil goes downhill to the driver's side and drips down to the ground. Just a drop or 2 every night. I would up drilling a 1 inch hole in the splash pan directly below the weep hole, and now the oil can leak into the air while I am driving. No more drops on the garage floor.

Your 14mpg is a different problem. You have leaking vacuum hoses which causes the ECU to run overly rich, and/or your O2 sensors are no longer working correctly. Using regular gas is not helping either, you need at least 89 Octane.

Klaus
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The 164 has a new home, all I am left with are a 95 854T and a 98 V70R :)