I can't see how there is labor overlap except in removing the downpipe. I didn't even remove the exhaust manifold with my 740's mitsubushi, and I can't imagine the garrett having much different of a setup.

The only point I have with the water cooling is that you don't have to cool down a water-cooled turbo. Just shut it off and call it good - unless you just gained 3000 feet going up your driveway and your turbo is glowing.
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1990 740 Turbo, on its way to stock specs, maybe beyond

I'm of the opinion that the labour overlap is not that great. The turbo and manifold are removed as a unit, and once off, the head is still a lot more effort - t-belt, cam cover, intake manifold connections, coolant, just to get ready to release the head bolts. None of those things require removal to do the turbo. And once they have the head off, well, you'll be told the valves should be "freshened up" and the seals too. Oh and the pistons, well there is some evidence of oil burning, perhaps rings and pistons.....and on it goes. Where do you stop?
You've proved that you know how to drive an oil-cooled turbo so that they last. You know to change the oil, cool the engine down before shutting off, and for sure you'll be able to do all that with a new one.
Install a rebuilt Garrett, oil cooled, and drive the car. That's my opinion.
Rhys

Hmmmm
ya might just want to do a head gasket while your replacing the turbo.
something to think about if-n your a keeping the car.
i dont let my turbos cool down but the last few miles i stay out of boost.
good luck
Mike

I'll play devils advocate here....

What condition is the car in? What condition will it be in 5 years from now? What is the likelihood the car will be totaled between now and then (does not take much with a car that old). Now make it ten years...

Second line of thought, where you unhappy in any way with the existing turbo? Do you plan to drive it until the wheels fall off or sell it down the road?

Me, I probably wouldn't do it and just make sure I spend the extra on full synthetic and allowing a cool down. Of course I am not a fan of that era of 7-series so I am the worst judge.

Along with water cooling, consider using only synthetic engine oils such as Mobil-1, as these can withstand higher temperatures without breaking down and forming ash and coke deposits on the turbine/compressor shaft.
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Bob: son's XC70, dtr's '94-940, my 81GL, 83-DL, 89-745(V8) and 98-S90. Also 77-MGB and some old motorcycles.

no, get the water. it looks like a hassle because of the extra money and parts, but if you got 225k out of the original 1, you'll get 300k+ out of the water cooled 1. that upgrade has been around since 86, i think, and anyone looking at the car to buy that knows volvos, an oil only turbo might mean no-sale. good luck, chuck.