could be the knacked turbo and the blades hitting the casing, if its smoking blue, it must be oil leading to either, rings,turbo,valvestem seals, if the bearings have gone in the turbo, pull the big inlet pipe off the turbo and wiggle the shaft of the turbo about, if theres loads of play its possiable that could be your problem, does it smoke on startup/over run or on boost?.

ive seen quite a few turbos in a state where they hit the casing!

but is more than likely as stated above, bottom end rattle!