[Phineas]

Ok so this is how it starts,

I bought a MK3 supra 7MGTE about three months ago, and about 3000km later it is now making whistling/whirling sounds while in motion and above about 2000rpm from the gear box area. However I do not believe this to be the gear box as when it is in neutral and you bring the revs up it smokes (this is white smoke and smells like oil) ALOT (a small garage would be filled in about 20 seconds holding the revs at 5000rpm), it also still produces a strange sound; however not as intense as when you go over 2000rpm whilst in motion.

In leading up to this i notice a couple of problems:
First being a squeling noise when droping gears, each gear change there was a squel;
Smoking after engine breaking and traveling downhill, however this smoke would eventually go away;
Oil pressure gauge faulty or not plug in, it remaind on 0 and sometimes went up 1 bar over the entire time i have had it.

I was told the smoke was because of the turbo, so I rebuilt the turbo and I believe smoke went away for a bit after engine breaking downhill but then returned.

When the whirling/whistling sounds occured i was travelling at about 100km/h and heard a large crunch, sort of like when you crunch a gear but not really, and i was not changing gears at the time. Also similtanously a crack appeared in the downpipe from the turbo.

Since then i have had a mechanic take a look at it and he said that he had a look at the turbo and could not spy any oil and also said the turbo appears to be in good condition, i.e. no shaft play (as you would expect because it had just been rebuilt). His final verdict was something about the copper sleeves in the bottom end being ruined and i would need to get the engine rebuilt or buy a new one.

Could someone please provide me with a second opinion and try shed some light on this. I am trying to work the cheapest option here, second hand engine or full rebuild. I can competently remove the engine my self and install so rebuild is not as much as it may seem. I can get a second hand engine on 105,000 km for approximately $1500. I live in NZ and this is a good price here.

Also further to note, as this could be important:
Top end was fully rebuilt in 2008 including a new head being fitted
A heavy duty clutch has been fitted
3" downpipe and exhuast
stock ct26 turbo set up