Here we have some severe damage to the thrust collar, thrust bearing, piston rings and subsequently the compressor housing and compressor wheel.
The customer reported oil smoke from a recently modified turbocharger, they had done by another identity. Upon disassembly it was found that this has occurred due to an incorrect and poorly orchestrated upgrade. The turbocharger had been rebuilt with a larger compressor wheel and a milled out compressor cover.
While the compressor wheel and cover modification were done to a good standard, this upgrade should be accompanied with a 360° degree thrust bearing in order to reduce the stresses of the increased load from the larger compressor wheel. Without it, the increased load (pull and twist action) of the compressor wheel has then caused the thrust collar to contact the thrust bearing, losing the oil wedge causing a lathe like effect. In turn this has allowed for the compressor wheel to close its already tight tolerances and touch the compressor housing. Also the movement of the rotating assembly has then ground away the square edge of both the turbine and compressor piston rings, hence the oil leakage and smoke.
Further inspection also discovered the turbocharger was running uncontrolled boost due to a waste-gate actuator failure, compounding the already present issues.