Yeah, that's what the problem sounded like... real common on all these cars.
There is a drain on the bottom of the intercooler - you may find quite a bit of oil in it. It's pretty well accepted that turbos use a bit more oil than normal models... you can't get good lubrication of a unit spinning so fast without losing a little bit. So it just builds up over time in the intake. The rubber hoses usually seem to rot from the inside out, so it's definitely entrained oil in the air intake. The turbo could be on it's way out- they don't usually live much past 160K-170K. But a rebuild is not too expensive when you're willing to do the work yourself- could be in the $400 range. If the turbo actually damages itself due to wornout bearings, it could be closer to $900. I'd keep an eye on oil usage. Don't worry about it unless it gets over 1qt per 1000 miles.
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Rob Bareiss, New London CT ::: '86 244DL- 215K, 87 244DL- 230K, 88 744GLE- 198K, 91 244 180K
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