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HI, I just bought my 4th Outback but first turbo ('05 XT limited with 78,000 miles). After 60 miles I hear clinking noises and take into local Subaru dealer. They tell me turbo is blown, specifically oil is in the housing - seals have failed - and fan blades are shot. We don't think any debris made it into the engine. I have read a number of posts on this site and so far have learned (trying to keep this simple as I am not a mechanic):
1. The oil filter in the banjo bolt is a design flaw and has caused numerous problems. If I change out the turbo I will have this inspected, as well as the oil pan to make sure there is no debris from the turbo.
2. Turbo requires synthetic oil and should be changed every 3750, not 7500 as listed in manual.
3. The turbos have above average failure rates and Subaru of America has not been cooperative.
4. Subaru sent a letter dated 9/12/08 to the EPA (per emission reporting regulations) admitting numerous turbo failures. I will try to post to this thread.

I found another couple of hundred posts on this topic at a Legacy forum site: http://legacygt.com/forums/showthread.php/anyone-oem-blown-turbo-please-post-83047.html

Any help with these questions would be greatly appreciated!
1. Could the turbo be covered under the emission warranty on the car? Has anyone had any success with this argument?
2. If I bite the bullet and change the turbo (assuming the engine is unharmed) should I have the dealer change/alter the banjo bolt filter?
3. If oil was found in the housing, could this indicate another problem with the engine or turbo set up? It seems oil starvation is the main problem with these turbos.
3. Anything else I can do before or during install to ensure the replacement turbo lasts a long time?

Thanks to all!!
 
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