What happened was at some point it was noted that the engine was making more smoke. I'm not entirely sure when it began, it was after a somewhat lengthy layup. Not sure how long it ran that way. When I investigated, the turbo wheel did not move, it was touching the hot housing. Volvo wanted $3k for a replacement, which led me to investigate how I might live without it.
IHI makes the engine and the turbo. The engine is quite common in New Holland loader and plows, Bobcats, etc. A new replacement turbo for those can be had for around $300 - 400. The difference between all the variants is just the turbo wheel trim. But no way I could ID the turbo wheel, IHI and Volvo are sworn to silence I guess. I took it to a rebuilder who says he sees quite a lot of this: either salt water or salt air eventually corrodes the housing which grows enough to interfere with the wheel. It cost me about $600 to clean it all up and ceramic coat the housing (which he said reduces the likelihood of a repeat). For that money, I put it back on - I was going to have to get a different exhaust elbow and a couple of other parts, remove the intercooler, etc, if I changed it over. It's been running well since.
The engine is pretty low, not that much drop from the turbo/elbow into the muffler. I doubt water ever backed up in there, but you have to figure it is saturated with salt air always. I never noticed any drop in power, but then I run it conservatively, 2000 rpm cruise, load is probably 30-40%. That's why I figured I could live without the turbo if I needed to.