Haven't personally seen a turbo failure on the 5. 9, but I have seen them on the N14, M11, the old 855's, Mack's, etc. On the older engines turbo failure resulted in LOTS of smoke and no power. On the newer engines, lack of boost would result in defueling, but I tend to think that it would still be pretty smoky, and definitely short on power. Since you have guages, you should also notice a total lack of boost, and high EGTs.
Most turbo failures are one of the following types:
1. Loss of fins - I've seen them go through the turbo housing, and through the piping between the turbo and the intercooler. On the older, non-intercooled engines this usually resulted in a fin (of pieces of such) getting caught in a valve or in the cylinder - not pretty!
2. Bearing failure - often results in the turbine or compressor wheel hitting on the housing, which in turn results in loss of fins. Since the compressor shaft no longer stays in one spot, the third failure can also occur at this same time.
3. Loss of oil seal - LOTS of smoke, no power. Allows turbo to suck oil from turbo bearings and blow it into the engine - this kind of failure has been known to result in a runaway engine, though it's not common. If the oil blown into the engine is in just the right quantities, the engine will run on that motor oil and can start to over rev. Like I said, not common though.