Crankwalking is less common.
I think the previous owner had some problems and ran the car too hard, knew it was about to take a crap, so he sold it to someone he thought would be an unsuspecting idiot.

You're looking at some serious money to fix the car.
I woul personally just put a new long block in it and find out exactly what wrong with the turbo.
It may be nothing at all, or maybe its had an internal failure.
Nothing uncommon.

 

now now Joshewuhh, no need for the name calling, he didn't know any better. No way to talk to a new person.

now, if we are correct and you have a crankwalked motor, you will need to either buy a new block or rebuild the block:
crank
pistons
rings
rods
main bearings
rod bearings
this will run you apx 700-800 for stock parts. you can sometimes find used blocks on ebay for cheaper than that but it's a timing thing. then you will need to find a new turbo. you can buy used stock turbo's (called a t25) for 100 bucks or less but you risk having the same problem within 10-30k miles... so buying a new one may ensure it to run a longer life.