I bought my first Volvo used two days ago. It's a 2004 XC70 with 197000. They said the turbo was blown. I paid $400 for the car and they gave me a "new" turbo kit. The body and interior is good. Both driver and passenger window jumped tracks so I need to fix them. The key won't turn so will have to deal with that also. Otherwise I like the car.

I did a PCV check by using a rubber glove on the oil filler and it blew up the glove. I haven't checked the PCV yet.
The coolant reservoir was way past "MAX". I got lazy and didn't check the compression.
On the short test drive it ran ok. I checked the codes and it was saying "turbo", "knock sensor" and something else but it wasn't anything I didn't expect.
On the drive home I blew a huge smoke cloud out of the exhaust only once and then did a slight smoke puff. It was a 50 min drive at about 50 mph.
Halfway home I stopped to register the car and noticed oil dripping down from the backside of the radiator on the driver side.

I now have the turbo off and it seems to be okay. the compressor spins ok and doesn't seem like it's worn out (but I don't know compressors).

When I did the compression check I got 150 on #1, #2, and #5 and 90 on #3 and 100 on #4. There was oil on the stop of the engine under the cover when I removed it. Every spark plug was wet and oily.

I am going to buy a leak tester to see if it's head gasket, valves, rings, or just needs a good cleaning with SeaFoam.

QUESTION: From the symptoms (and without the leak test data) what am I dealing with? I may be convinced to replace the head gasket but I'm only $400 into the car and could sell it to a wrecker and sell the turbine to get my money back and move on to a different XC70.