Turbochargers do have oil seals at each end(outside the bearings, but before the wheels) These oil seals are like little piston rings(all steel) and they can fail. I have seen turbos on my Dad's farm tractor "slobber" out a little oil around the exhaust clamp when the tractor is hot (with hot oil) and it is idling for a period of time. Example of this: Using tractor to blow haylage or silage up the 80 foot silos, then let that tractor idle while you drive to the field to get the next wagon, then if it took longer than normal to get back to the silo[over twenty minutes] then I might see oil slobber at the clamp, but never out the muffler. One way to tell if it is only a turbo problem(oil seals) and the engine is problably ok, is to remove the turbo at is 4 bolt mount flange(hot housing) and look down into the exhaust manifold itself. If it is just dry carbon and soot, then the turbo is the culprit. If it is wet and oily, then you go one step deeper, and pull the exhaust manifold and see which individual cylinder is causing the oily wetness. Now, there is the possibility that all the exh. ports are dry, but the failed turbo let some oil go back down that mounting flange area and caused it to be wet. Important Note: you can get mislead by looking at exhaust ports IF the engine has been sitting around idling for a long period of time(they may look slightly wet and actually be a normal condition because you haven't worked it hard lately and a little oil gets by the rings and the exh. valve guides). If you are uneasy about any of this, have a professional mechanic look at it. Another note: Any time one replaces a turbo, ALWAYS replace the air filter or clean the oil bath air cleaner! One should also prelube the turbo cartridge(center section) with clean engine oil down the oil inlet to insure those new turbo bearings have oil at the first intial start-up. I am not exactly sure of the JD setup, but this is works for Caterpillar engines. Hope this helps a little.
