Well if the turbo is free then you should be able to take off the bellows that is hooked to the inlet side and reach in and spin it with your fingers. If not then that could be the problem, but if it does spin then the piping might be routed wrong or and end open or busted. The only other thing I can think of is that the wastegate might be stuck open. I am not sure how to check that one, but I bet someone here does.
Also just for grins, make sure the air filter isn't clogged up or the AFM. I noticed the radiator is missing the fan shroud too. Check ebay for one, it will make a difference in the cooling. Also, if the engine isn't losing coolant, ask the owner if the head gasket has been replaced. If not then you might want to retorque the head bolts to a higher setting. The stock torque for stock head bolts is what is causing the notorious bhg. I think most are retorqueing the bolts to around 65 to 70 lbs.
Good luck with it. I bought my 87 turbo for the same price and same faded paint but black. Eventually I will paint it but getting everything else working was my first priority.
Russ
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