Just a quick update. Scheduling conflicts have prevented me getting the car to my buddy's shop. It should happen by the end of the week.
Here are a couple of theories that I think are possible:
1) The crank case is pressurized by having a restriction on the PCV breather line (maybe the foam in the catch can is too restrictive). This would not allow oil from the turbo to drain back into the pan. So the oil backed up into the head, and had no where else to go but the catch can. I think if this were the issue, the PCV catch can would have been catching a lot of blow by. BUT it could cause the turbo seal to be blown if it was deluged with oil.
2) There is a restriction in the oil line going to the turbo (coming off the head at the banjo bolt). Since oil couldn't get to the turbo, it failed. The oil line that feeds the turbo also feeds the right side AVCS. So theoretically it makes sense that if there was a restriction, then the AVCS wasn't functioning properly (hints the stutter at high RPM -- the cam wasn't advancing). The infamous "screen" in the bajo bolt HAS been removed.
3) The oil passage in the head is cracked. Oil pressure is filling the valve cover/cam area, but not feeding the turbo and AVCS with oil pressure.
What I don't know is the how the oil is routed through the head until it gets to the "T" at the banjo bolt. Or if it is possible for that line to be restricted and force oil into the cam/valve cover area.
What say you?