Steffan, the compressor wheel look good.

If you turn the turbocharger on end, is there any oil in the compressor housing.

It doesn't look bad. You have had oil thru the I/C and back thru the bypass valve.

This could have come thru your crankcase. Have you had a recent leakdown test??

 

Any updates Staffan? Did you perform a leakdown?

 

Thanks Kevin!
Due to time constraints the turbo is being renovated by a local company.
They found particles in the oil which worries me.

Just as Kevin pointed out the compressor wheel is good, the turbine wheel had signs of hot shot down or high exhaust temperature but in general the turbo is good, will be ready in a couple of days and send to Germany.

Found a movie on Youtube (see below), I pass this car 7:00 minutes into the clip, at 08:10 you can see the amount of smoke the car generated, I stayed on third gear all the way down to the jump (Pflanzgarten), the continous high revs generated tons of smoke!
Smoking Turbo

The turbo tuning company finds it less likely the turbo could generate the amount of smoke I described to them, they have found traces of oil in the compressor and turbine housing, but not much.

I am hoping it is the turbo, will change engine oil and check for particles.
Still discussing with the shop about checking the engine, I am not sure they have understood what I want them to do, they are talking about a compression test, I need to do some reading to really understand the difference between that and a leakdown.

I have ordered a new airfilter to eliminate the possibility of a clogged filter, causing the compressor to suck oil (not sure it works that way on these cars), I had oil coming into the filter from inside the engine compartment.

The day before this smoking started I had a loud bang, sounded like an exhaust bang, not sure if this is some sort of tell.

After the exhaust bang I had a ticking sound, thought the exhaust bang made something to the valves (turned out that the ticking sound was an exhaust leak from one of the cylinders). When I was adjusting the valves it felt that I had low compression on one of the cylinders when I turned the engine and a "whosing" sound, talked to a shop who said it was normal (never heard it before).

I am afraid I have an engine problem....

 

There is no need to fear. Think of a plan for diagnosis. You may not have a serious problem.

The turbo is coming, fine.

The leadown tester is close to a few hundred pounds so they sould have it. It pumps air into the cylinder, measures if air leaks out. Done with warm motor. The experts know the figures. Expect around 3-5% leakdown per cylinder. The compression test is important, but the instrument(tool) is slightly different.

The backfire could be a simple sign.

I would use a shop that works exclusively on Porsche. This will enable you to foresee some issues.

 

Thanks Bernard, your post is better than therapy

Tried to get in touch with the shop today, will try again tomorrow.
I am certain they will find the problem, the owner is the former chief engineer for Manthay Racing, a famous German racing team. The only "problem" is that they have very little experience with turbo cars.