Well... . the verdict is in and it's the worse case scenario. The injector solved the smoke issue, mainly, but they're pretty sure number three cylinder is scored and number four is missing.
No problems with the injection pump. I'm looking at a rebuild or a new motor.
A short block and a rebuild from what they can salvage from this motor will probably run somewhere in the vicinity of 9K, which doesn't include a new turbo. The mech recommended not trying to run with this turbo. If two cylinders are gone or down in power, I'd say the turbo probably took damage.
A new motor will run a tad over 11K and comes with a two year, 100K mile warranty.