I have heard different stories that constitues a blown turbo...

Smoke... yeah well dont all DSMs smoke a little? Shaft play... what turbo doesnt have a little shaft play.

Well my car is running better after chris set my timing... and it still only boosts to 7psi... The data logger says Im running lean... and it pulls timing..

There is no way I could be running lean with 550cc and a 255lhp walbro... and no afc (now running a hacked 1g mas) So I take it all apart again... I see some scratches on the inside of my Turbo housing... and a little oil in the IC pipe... I start to think it may be a blown turbo... but would a blown turbo even reach 7psi? wouldnt I hear it? And why would a blown turbo cause my car to run lean? I think my turbo is worn but not blown, and that my fuel issues are something else mechanical? or maybe O2

 

You'll know when you have a blown turbo. Usually a blown turbo doesn't have the "spooling" sound of a normal operating turbo, but rather a really high pitched whistle type sound, a.k.a. the "death whine." From the symptoms you are describing though, you may very well have a blown turbo.

Hopefully you have some money put aside if that is the case. At least yu have some supporting mod done already. Good reason to upgrade now.