Loss of power, excess smoke, sudden fluctuation in fuel consumption, high engine temperatures and oil leakage can all be signs that indicate turbocharger malfunction. There are four major causes for turbo troubles:

Oil Contamination:

May not be noticed visually, but causes severe damage to your bearings. Bigger particles may damage the shaft and bearing housing internally, being harder materials the damage are slightly less.

Lack of Lubrication:

Please note that damage happens very rapidly if your turbo is without oil. The usual tell tale signs is extreme discolouring of shaft journals.

Exceptional Operating Conditions:

Overspeeding/Overboosting/Excessive Temperatures

Typical damage is high temperature at the bearing journals resulting in the oil burning and carbon caking around the shaft. This can cause the wheels to burst and damage the housings.

Foreign Object Damage:

Hard foreign object entering the compressor and bounce around in the compressor inlet, damaging all blades on the compressor wheel. Salt and sand causes severe erotion and corrosion eventually leading to blade failures. A hard foreign object entering the turbine will damage the turbine wheel on the shaft. Even small objects as rust scale can cause severe damage to these high speed components