Okay, while swapping out the sway bars on 06 XC70, I noticed oil seeping out between the plastic inlet hose and the inlet of the turbo. I know from previous turbo cars that oil can build up in the inlet thanks to leaky seals on the shaft, but is there another issue that could be causing this like a PCV issue? Car runs great, 103K on the clock.

How long has it been since someone cleaned the intake tract?

Air flow in an engine is not an on/off thing like a light switch - as throttle conditions change, the air has pulses, momentum, back flows, and what are called standing waves, etc. can happen in the intake and exhaust systems.

If it bothers you, clean the intake tract hoses, etc and check the worst spot in 1000 miles or so.

Unless build-up is excessive, you do not have a problem.

Thank you and Klaus. The car has been driven by my wife in the local area only, ie. way sub 4K rpm. I took it out and thrashed it to redline for about an hour, but no blue smoke out the tail pipe. I let it idle and then sprayed ether into the intake for a few seconds, then shut it down. In total I did that 5 times, reassembled the intake, and started the car again. Unstable revs "ether will do that", backed the car out, turned around in D and floored it, I must say the blue smoke our the tail pipe was quite impressive. The smoke is gone now, idle has improved, and I believe that with your input I resolved the issue without a turbo tear-down.

Thank you,

Jorrell

Ahh, a 'tune up'!
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Keeping it running is better than buying new

During boost, the PCV vents into the intake air stream. The oil vapors will condense in the cold air. Because the boost comes on at just above 1500 rpm in the LPT engines, oil will collect in that area. Cleaning it is quite simple: with a warm/hot engine, use the right foot to get over 4000 rpm, drawing lots of fresh air in and pushing the oil to the turbo and intercooler. Of course, then the problem migrates to the bottom of the intercooler as the oil then leaks out of the hose before the throttle body.

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Keeping it running is better than buying new