I took the new turbo back to the Garrett dealer for testing and they said it was working well and it did not leak.
As "antichrist" did they suggested the return hose which I checked and had just replaced (used one) with the turbo.
The also suggested that there could be back pressure due to a plugged breather (Cyclone).
So I took the turbo back to the mechanic who checked the cyclone and found it OK (just removed the hose and felt the air coming out with the engine running). So he now thinks and will check some sort of a "return valve" or port of some sort somewhere close to where the oil filer is and he said that if it is plugged and the oil in not free to return it could cause a pressure build up which impedes the oil return from the turbo. What exactly is this valve, I have yet to research.

And as I wrote above, when the car smoked and I opened the hood while the engine was running there was a whistle coming from the oil cap and when I turned the engine off it continued for a little bit indicating there was pressure built up at least inside the crank case.Can the cyclone plug itself or malfunction on and off? Can whatever valve he's talking about cause that pressure build up at the crank case?

 

Good call.

As for the cyclone, I know what one is, when I drove cement truck we hade them on our engines, they were aftermarket ones, I have no real idea about them other than a basic knowledge of how they work.
I have no specific knowledge about the LR version and how it works.

On the turbo there will be a waste gate but that has nothing to do with the oil.

As for the noise you heard, it could have been a vacuum or a pressurization of the crank case, I am betting more on a vacuum and it was sucking air in through the oil filler cap.
Had it been pressurization of the crank case I tend to think it would have blown several seals, like the front and rear main seals.
I think AntiChrist is on the right track with the clogged oil return line for the turbo.

 

So this is where I stand now, The mechanic removed the turbo, plugged the air intake on the manifold and left the hose/pipe to the inter-cooler tide to the side.
Also plugged the oil feed to the turbo and the return line and told me to drive it for a week and see what happens. If there's no smoke and oil problems then the Turbo is at fault.
I have to wonder about the fact that the air is now going through the hose, intercooler and engine without a filter, is that OK. I will be installing a screen mesh on the intake pipe to prevent large objects from getting in.

 

Well, if you're in the UK where it's been raining like crazy there shouldn't be much dirt/dust in the air. Otherwise I'd rig at least a temporary filter.
You might get some smoking anyway since the injection pump is tuned for more air coming in than you get running it NA.

Assuming it smoked when idling and just reving some, if it had been me my first test would be to fill the oil to the full mark, disconnect the oil return drain and run it letting the oil run in to a can, stopping when you've collected about a quart, to see if it smokes. If not that would point to the oil return line.
Of course, if it only smokes when driving then you couldn't do that.

 

It has come to a deadlock. My mechanic removed the Turbo and put a plug in its place at the manifold and of course also plugged the oil feed and return. I drove the car like this a few hundred kilometers over the past few weeks without this smoke cloud or any other major problems. To the mechanic, this proved that the fault is with the turbo. The Garrett dealer on the other hand is determined that the turbo is fine and the fault has to be with the car. So now that I paid for the Turbo I may have to buy another one and try again and of course the concern is that I buy the same problem happens with the new one and I end up at the beginning.

 

Lets think about this logically, engine smokes going down the road, suspect the turbo, remove the turbo, smoke stops.
Its the turbo.
It is possible that you got a bad turbo if you bought a new one and it is possible that it was rebuilt wrong if you had it rebuilt.
If it is the original one it is possible that it is just plain worn out and needs replacing.
Your mechanic did the right thing to diagnosis it and I agree with him that the turbo is bad.
I have not gone back and read the entire thread and it has been several weeks since you last posted on this so I do not remember everything that you did prior to today.

 

I hear you. It does seem simple but the dealer who sold me a brand new Garrett turbo doesn't seem to think so.
I have grown tired of the whole thing and will just buy another new or rebuilt turbo and move on with my life.

 

Dont they warranty their turbos?
Cant they just do a even exchange to keep you happy?
And then if the problem is still there after that then its on you and you keep looking.
But I really think its the turbo.

 

They warranty it for three months but they are convinced that there's nothing wrong with it and went so far as to suggest that the mechanics are sabotaging the car when they install the turbo to sell me one of their own. The mechanic on the other hand is sure it's the turbo fault that he offered to install a rebuilt turbo for me and guarantee it for one year and since he will be doing the supply and labor I will be protected from that blame game.

I'm in Egypt by the way. This is the norm here!

 

That is a load of BS.
Here is the States 99.9% of suppliers would just swap you turbos to keep your buisness and to keep you from bad mouthing them to others.