The seals I suspect would be bad are inside the turbo. Look at this drawing:
http://htturbo.com/gp.html
If you look at it, you will see 1,2,3,21 are all a type of seal. When these go, oil/water can get inside the turbo. But, there is also a journal bearing #4 in the drawing that may be bad as well. When you pull the motor, look for oil in the output of the compressor side. That is a clear indication a seal is going or gone. When you pull the turbo, feel for axial play (in and out) all journal turbos will have some up and down play since there is a bearing journal and the oil pressure inside the journal provides the bearing action. But, axial play is bad.
You can either rebuild the turbo (have it done so it is balanced as well) or replace the CHRA. Rebuilding the turbo is possible if the turbine and compressor blades are not damaged. If the turbo blades are damaged, you need to look closely at the housing as well.
Rebuilds are in the neighborhood of $250/300 a turbo. New CHRA is around $400 per turbo.
Here is a link to a new CHRA for your turbo.
http://www.z1motorsports.com/product_in ... ts_id=2574
Here are the instructions on how to install it (so you can see the task isn't horrible)
http://upload.z1motorsports.com/Turbo%2 ... 20CHRA.pdf