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Time to rebuild the turbo. Rebuilding the turbo is the easy part. All you need the snap ring tool and patients. The hard part is taking out and installing the turbo.
I was able to find OEM rebuild kit from Turbosturbo. I just didn't trust the rebuild kits on EBay
Prep the patient on a nice dog pad from Costco. Start a audio book
I was very lucky. The turbo came apart easily
Here is the problem. See next picture with arrow for close up
Hopefully the new sealing ring will extend past the ridge. see arrow
Good Times!!!