Lost the Turbo Dealer blams CHIP!

[A4Pdot]

Just lost the turbo, no boost what so ever. The dealer asked about a chip, but I denied it. Then they said that it was deffenatly chipped and I said it wasn't. So the discussion goes on, will tell you more when I find out. Can they actually tell if the car has been chipped? I deactivated it before I dropped her off.

[ravenmadx]

they can still log boost. that will definitely say if your chipped.

[A4TwoZeroT]

if they really want.. they can find out

[A4Pdot]

Shit! So I guess, how much is an aftermarket turbo? This sucks.....

[08lichmanj]

k04 for you.

[ravenmadx]

ask them to give you the turbo and get it rebuilt. Just an option. A lot of times they can make the turbo more efficient and last longer.

[TJHUB]

Just lost the turbo, no boost what so ever. The dealer asked about a chip, but I denied it. Then they said that it was deffenatly chipped and I said it wasn't. So the discussion goes on, will tell you more when I find out. Can they actually tell if the car has been chipped? I deactivated it before I dropped her off.

Who's software are you running? Do you know what you were boosting at?

[davis449]

Wow, you lost the turbo or the DV? I wouldn't think you would lose the actual K03.

[A4Pdot]

APR 94 octane... don't know the boost though.. They haven't figured out if it is the Turbo it self, and they won't know till they take it apart...

[gpxluke]

Chipping can blow up a turbo???

Sorry to hear that man, at least u can get a K04 then lol

btw, which dealer did u go to

[Tgr_Clw]

Chipping can blow up a turbo???

Yes.

[kdawgg]

wow i didnt think chipping can blow ur turbo... did u usually drive it hard? i should be careful then

[b6onboost]

are you sure your turbo is shot and you didn't just rip a boosted line or blow the DV.

I can't see how a K03 goes that fast, chipped or not...your car is an 07.

[CaRJoE0220]

The noobs in the B7 forum have gone up drastically lately

chip = running higher boost then normal = pushing turbo past factory specs = blown turbo

YOUR FUCKED

now the real question is are they going to charge you for all this work they are currently doing once they decide the warranty is no longer valid?

prepare to spend LOTS and LOTS of money buddy

10k+ IMO

[TSlice]

The noobs in the B7 forum have gone up drastically lately

chip = running higher boost then normal = pushing turbo past factory specs = blown turbo

YOUR FUCKED

now the real question is are they going to charge you for all this work they are currently doing once they decide the warranty is no longer valid?

prepare to spend LOTS and LOTS of money buddy

10k+ IMO

I see where you're coming from, but is this really necessary? As others have said, there are other alternatives (such as a K04 for $4k) to spending $10k (if it even will be that much) at the dealer for a new turbo/manifold. I wouldn't be so harsh, we've all been there.

[Lt. Lawton]

10k for a k03? Fuck man you are better off getting the APR k04 kit and getting a reliable mechanic, not from stealership, to install it for you. It'll probably cost you less and you'll be getting more power.

Oh and CarJoe, don't be such a fucking asshat. kkthxbai.

[Sanjman]

So you still don't know whether it is the Turbo or the DV? Most likely the DV... I would deny deny deny until they actually say... Yeah it's the TURBO FOR SURE. Loss of boost could be a lot of things...

[AWDTurboLuvr]

What dealer is this? Audi of Richmond?

[Lt. Lawton]

Haha, looks like whichever dealer this is, is gonna lose a lot of business from people who like to modify their cars or even jsut chipping their cars.

[A4TwoZeroT]

I see where you're coming from, but is this really necessary? As others have said, there are other alternatives (such as a K04 for $4k) to spending $10k (if it even will be that much) at the dealer for a new turbo/manifold. I wouldn't be so harsh, we've all been there.

i would expect around $10k... this is a dealership.. they will charge a grip on parts.. and even more on labor.. i.e.: if a part cost $1000 .. labor = $1500
so turbo itself cost around $3-4k + labor and parts that go along with the turbo = $10k

[A4TwoZeroT]

Haha, looks like whichever dealer this is, is gonna lose a lot of business from people who like to modify their cars or even jsut chipping their cars.

the % of audi enthusiast that mod their cars is very low compared to those that don't .. most audi drivers are old people.. most a4 drivers are girls or old people..
we are not doing any harm to their business

[A4Pdot]

are you sure your turbo is shot and you didn't just rip a boosted line or blow the DV.

I can't see how a K03 goes that fast, chipped or not...your car is an 07.

Ya I am hopping that it's going to be an easy fix, will keep everyone informed. But when the dealer did a quick diaog of the car it came back with no boost at all. Plus I didn't hear anything leaking from a hose, but the power loss was not a sudden "thump" it was a gradual let go. So I am really hope it's this and not that....

[marty was here]

wait pause for a second gents, i just went through this myself, outta warranty at 62k miles after being chipped for 45k+

it cost me $1,880 + tax to replace my KO3

as for the chip, remember to set the damn thing in stock and ur fine, ive had dealers look over my engine, run logs, and everything cleared up

[marty was here]

Ya I am hopping that it's going to be an easy fix, will keep everyone informed. But when the dealer did a quick diaog of the car it came back with no boost at all. Plus I didn't hear anything leaking from a hose, but the power loss was not a sudden "thump" it was a gradual let go. So I am really hope it's this and not that....

lol was the smoke everywhere? mine did that, poor chick in back of me couldnt see shit

[CaRJoE0220]

I see where you're coming from, but is this really necessary? As others have said, there are other alternatives (such as a K04 for $4k) to spending $10k (if it even will be that much) at the dealer for a new turbo/manifold. I wouldn't be so harsh, we've all been there.

well lets break it down for a second. They have already spent like 12 hours on the car. Then they tell him its the turbo and the wont cover it under warranty he is then charged for the 12 hours of initial work

12 Hours @ $125 = 1,500

Then if he were to buy a new K03 from the dealer I dont even want to guess how much they are going to charge but probebly as much as a aftermarket K04 if not more

New Turbo = 4k+

He chooses to go get the K04 or even K03 and have the dealer install it, They will most likely charge for it to stay there while they wait for him to get them a K04,

Turbo comes and they have to drain all the fluids, install turbo, reflash car, new fluids, testing

15 hours labor = 2,250
Fluids and labor for that - 500

Is 10k such a far off guess now?

This is assuming he didnt fuck anything else up driving with a blown turbo, and that everything goes smoothly

Oh yeah they wont cover his rental car so bam another 500 for how long this will take.

PS: I think im being conservative on all my numbers to.

[A4TwoZeroT]

dealers don't install aftermarket parts.. unless is a mod friendly dealer..
but seeing that this dealer is blaming the chip.. i'm assuming this dealer is not mod friendly

[b6onboost]

Did you hear any high pitched 'drilling' type noises before the turbo went? Were you on a stock DV?

A gradual power loss seems more like a boost leak or blow DV. When you blow a turbo it starts to sound wierd like its having trouble spolling, then one day it just goes.

[TJHUB]

You guys that think it's going to be anywhere near $10K are flippin' nuts. Know your crap before you say things like this. Turbos are NOTHING in labor to swap and the turbo itself won't be anywhere near $3K. [rolleyes] Jeez, what's with you guys?

Let them diagnose the issue to see what's really wrong. NEVER fess up to the flash even if you have to pay the bill. If the turbo is blown (no boost does not usually mean blown turbo) AND they're not going to cover you, pull the out of their dealership and fix the thing yourself. A blindfolded monkey can install a new turbo. [up] All you need to do then is source a new (rebuilding costs about 70% of new - don't do it) K03. [up]

Good luck and I hope it works out for you.

[TJHUB]

Did you hear any high pitched 'drilling' type noises before the turbo went? Were you on a stock DV?

[up] Yes, that's more like it.

[i3oricua]

I have to believe that you didn't just blow your turbo without something giving a sign first. Did you see smoke anywhere? If so, what color? Is the car hesitating? Is it just a loss of straight power? Do you have a hard time starting it up? What noises does it make now if any that are not normal? Overboosting will wear out a turbo, but no oil getting to it will burn it out. Overboosting unsafely will blow your engine and you'd know if that happened...trust me anyone who has had a turbo Honda or any other car where they installed a manual or electric boost controller and got stupid with it can tell you what that's like turning up the boost without a proper tune. If they pull out the turbo and allow you to see it, notice if there's any oil build up around the turbine or leaking out, could be blown seals on the turbo. Check to see if the turbine ( I may be calling it by the wrong name but it don't matter) has a lot of play in it (wiggle from left to right and see if actually touches the side, it will probably have a little play but not excessive and it should spin freely without rubbing the sides) or if any of the fins are chipped. Take photos if you can. Good luck to you and hope this helps.

[bhvrdr]

Just lost the turbo, no boost what so ever. The dealer asked about a chip, but I denied it. Then they said that it was deffenatly chipped and I said it wasn't. So the discussion goes on, will tell you more when I find out. Can they actually tell if the car has been chipped? I deactivated it before I dropped her off.

To clarify what some others have said...

First, the ECU does NOT keep logs of boost so do not worry about that. That is myth. Second, Audi dealerships are terrible today and have very little independence anymore in their diagnostics outiside of set specified troubleshooting protocols. They dont even datalog anymore. Since you posted that you have no boost but posted nothing about a very loud siren like sound (something that would usually come to mind right away in a post) it is very likely you have a PCV or BPV problem that are terribly more common. Fourth, if you really did have a turbo failure, it will not cost 10 grand. It is a four hour job (Audi may charge you twice as much) and a few grand max in parts.

cheers! mike

[exorcet]

yeah if the turbo 'blew' gradually (you said it was a gradual decline in boost) there would have been noise, burnt-oil smoke from the tailpipe, etc etc.

If it blew immediately, in one moment, well, it would have been hugely obvious on so many levels.

I think the gradual loss of boost is probably related to a boost leak that just got worse and worse (Diverter valve, hose, etc).

Any chance you can find what error codes were pulled?

[tvieira24]

I'm willing to bet its not your turbo and it's either your wastegate stuck open or the diverter valve. Blown turbos still make boost, just not a lot and not consistently unless the shaft is seized and that only happens when the bearings are starved of oil.

When the seals blow, you'll start burning oil and you'll see a fair amount of black/blue smoke due to the oil transfered from the bearing to the turbine housing.

[TSlice]

well lets break it down for a second. They have already spent like 12 hours on the car. Then they tell him its the turbo and the wont cover it under warranty he is then charged for the 12 hours of initial work

12 Hours @ $125 = 1,500

Then if he were to buy a new K03 from the dealer I dont even want to guess how much they are going to charge but probebly as much as a aftermarket K04 if not more

New Turbo = 4k+

He chooses to go get the K04 or even K03 and have the dealer install it, They will most likely charge for it to stay there while they wait for him to get them a K04,

Turbo comes and they have to drain all the fluids, install turbo, reflash car, new fluids, testing

15 hours labor = 2,250
Fluids and labor for that - 500

Is 10k such a far off guess now?

This is assuming he didnt fuck anything else up driving with a blown turbo, and that everything goes smoothly

Oh yeah they wont cover his rental car so bam another 500 for how long this will take.

PS: I think im being conservative on all my numbers to.

I wouldn't be surprised if the bill was $10k, I was surprised with the tone you took and the sureness with which you spoke about it being $10k with no facts to back up your numbers. You're still just throwing out guesses and made up numbers. This is not really helping him; just scaring him. If you had hard figures to post, we would all be interested.


A blindfolded monkey can install a new turbo. [up]

All you need to do then is source a new (rebuilding costs about 70% of new - don't do it) K03. [up]


Unfortunately, it's not this easy since the hot side of the turbo and the exhaust manifold are cast as a single piece. You can't simply unbolt the turbo and bolt on a new one, you must replace the exhaust manifold and turbo as an assembly.

[A4Pike]

Screw it, pull the engine, build the internals, get a freaking GT35, 4 inch pipe, FMIC, new diff, and race that beast... hahahahaha

just kidding...

I would watch one thing on the "do they know if I have a chip" comments... even a monkey can input commands to turn chips on and off... I don't know a ton about them, but I do know that APR has a set of things to do with the cruise stalk to turn it on/off... they do this at the dealer, and then they can see the map change...

just my $.02 Good luck man...

[exorcet]

1 K03 turbo = $1200 MSRP max
5 hours of dealer labor = $625
Gaskets, hardware, etc = $100
total less than $2k.

For 10 grand I would retrofit a 2.7TT in the mo-fo. Hell you could probably do that for 7 grand.

[Tgr_Clw]

For 10 grand I would retrofit a 2.7TT in the mo-fo. Hell you could probably do that for 7 grand.

Heh. Not that simple or cheap. If it was a measly 10 grand, plenty of B5 A4, B6 and B7 guys would've done it already.

[PannikAttk]

The noobs in the B7 forum have gone up drastically lately

chip = running higher boost then normal = pushing turbo past factory specs = blown turbo

YOUR FUCKED

now the real question is are they going to charge you for all this work they are currently doing once they decide the warranty is no longer valid?

prepare to spend LOTS and LOTS of money buddy

10k+ IMO

Wow, sounds like you were never a noob yourself! I imagine you were born knowing everything there is to know about cars, specifically the one of topic right?

The guy is going through a crisis and needs advice, not an attitude.

The PRICKS in the B7 forum have gone up drastically lately!

[TSlice]

^ x2

[bhvrdr]

Unfortunately, it's not this easy since the hot side of the turbo and the exhaust manifold are cast as a single piece. You can't simply unbolt the turbo and bolt on a new one, you must replace the exhaust manifold and turbo as an assembly.


Actually this makes the B7 turbos much easier to install. The new k03 with integrated manifolds come mounted on a quick release flange. IN the self study literature, one of the main benefits listed is actually ease of service/replacement. Easy out and easy in. You can actually unbolt everything without even removing the cat if you wiggle it right. Some one who has done more than one could do it in a couple hours.

cheers! Mike

[TJHUB]

Actually this makes the B7 turbos much easier to install. The new k03 with integrated manifolds come mounted on a quick release flange. IN the self study literature, one of the main benefits listed is actually ease of service/replacement. Easy out and easy in. You can actually unbolt everything without even removing the cat if you wiggle it right. Some one who has done more than one could do it in a couple hours.

cheers! Mike

Wow, what's with these guys? [eek] I've done 5 turbo swaps (some different types) to date. I swapped a motor in a B5, went through an AEB head and install, and upgraded a B5 Tip transmission with Level 10 components all by MYSELF (I have plenty of pics to prove most of it). It's surprising how many of you guys don't really know what you're talking about, but you're still very willing to spew all kinds of B.S. [rolleyes] BTW, it's also just great you try to scare the crap out of a fellow AZ'ner for what purpose? Wow, nice guys! [eek]

bhvrdr: It's always great when you post with such knowledge and patients. Thank goodness you're an Audi guy. [up] You give me something to live up to. [:)]

[TSlice]

I wasn't commenting on the difficulty of the install, I was simply saying you can't exchange the turbo alone; turbo and manifold are one unit.

[bhvrdr]

bhvrdr: It's always great when you post with such knowledge and patients. Thank goodness you're an Audi guy. [up] You give me something to live up to. [:)]

That's kind of you bud. I appreciate it. Sounds like you knowledge of hardware is something I can hope to live up to.

cheers! Mike

[TJHUB]

That's kind of you bud. I appreciate it. Sounds like you knowledge of hardware is something I can hope to live up to.

cheers! Mike

You're most welcome. But please don't put too much value on my knowledge of hardware. I'm just a guy who's capable and somewhat ballzy (more of the latter I'd say [;)]). I'm mostly been there, done that... [:D]

[quattshot]

Strange he never mentioned smoke was drastically flowingB5 S4 out of his exhaust??
When I blew my 2 KO3's in the B5 S4, you would have sworn my car was on fire!

PS, My car was 3K OUT OF WARRANTY and Champion MotorSports was nice enough to cover everything!

[snosk8tr123]

I blew my turbo and my dealer knew i was chipped. They said that there is no way a chip would have done that.... They replaced the turbo, wastegate, exhaust manifold, and w/e else... my car is also an 07. They said it would have been about $3500 if i were to pay for it... but i didn't

[tvieira24]

I blew my turbo and my dealer knew i was chipped. They said that there is no way a chip would have done that.... They replaced the turbo, wastegate, exhaust manifold, and w/e else... my car is also an 07. They said it would have been about $3500 if i were to pay for it... but i didn't

The techs at that dealership are pretty silly. Where do they think the increase in power comes from? If you increase the amount of boost (psi) past what it was designed for you will wear out your turbo quicker.

As far as your turbo dying, it was probably a fluke considering the car is so new and the turbo has very little use/abuse.

[4flow]

The dealer asked about a chip, but I denied it.

I sat with my service tech. and I told him what I have, and in the future will add more in terms of performance, and briefly told him that he is not liked in our community. And I as a customer demands the best service, because I bought a car that is guaranteed top performance, similar to a flying "JET"

Do not lie to your service tech. because your car will have its history in their system, the only way to really detect furture problems is accurately log your service history, and your mods.

Magnuson-Moss Warranty Act?

Audi is promoting the "Truth" Performance, if know how to twist this around, you will get what you want. Performance in definition satisfies a customer FULLY 101%

You will have it done in no time, be honest to a degree that it benifits you.

[lnferno]

Actually this makes the B7 turbos much easier to install. The new k03 with integrated manifolds come mounted on a quick release flange. IN the self study literature, one of the main benefits listed is actually ease of service/replacement. Easy out and easy in. You can actually unbolt everything without even removing the cat if you wiggle it right. Some one who has done more than one could do it in a couple hours.

cheers! Mike


Exactly, my shop installed my turbo in 2.5 hours.

[Anthony]

The noobs in the B7 forum have gone up drastically lately

chip = running higher boost then normal = pushing turbo past factory specs = blown turbo

YOUR FUCKED

now the real question is are they going to charge you for all this work they are currently doing once they decide the warranty is no longer valid?

prepare to spend LOTS and LOTS of money buddy

10k+ IMO

This sort of attitude and behavior is not appreciated here. Yes, it's the B7 A4 Forum, where we have new users joining us every day. So please, get off your high horse or get out. Thank you.

[Berk@sheepsquad]

To clarify what some others have said...

First, the ECU does NOT keep logs of boost so do not worry about that. That is myth. Second, Audi dealerships are terrible today and have very little independence anymore in their diagnostics outiside of set specified troubleshooting protocols. They dont even datalog anymore. Since you posted that you have no boost but posted nothing about a very loud siren like sound (something that would usually come to mind right away in a post) it is very likely you have a PCV or BPV problem that are terribly more common. Fourth, if you really did have a turbo failure, it will not cost 10 grand. It is a four hour job (Audi may charge you twice as much) and a few grand max in parts.

cheers! mike

Amen.

It is funny to see one coming out with the blown turbo assumption, and then bunch of lemmings jumping on the wagon. [:D]

It takes a lot more to blow the turbo than a flash software. More than likely a blown DV. If I were you I would contact the tuner that installed the program and have them check the DV for you. It is a very simple process, replacement will cost you around $65.00/$70.00

Stick to your word eventho it is a lie, dealership can not prove it at this point.

Good Luck

[CaRJoE0220]

This sort of attitude and behavior is not appreciated here. Yes, it's the B7 A4 Forum, where we have new users joining us every day. So please, get off your high horse or get out. Thank you.

Hey Anthony thanks for the input and suggestion, ill keep it in mind!!!!! [hail]

[denisk]

Keep us updated man. Good luck.

[alex310]

Good luck to you man! Hope everything works out!

[Pyrodorcha]

I'm another one of those noobs, just out of curiousity, is it impossible for a dealer to simply turn the chip back on if they know the cruise control button sequence?
also people keep quoting magnuson moss but I'm still not so sure anyone I personally know is financially stable enough to prove the dealer and their lawyers wrong in the event that they call our bluff...
that 91 octane and the 93 already put a strain (albeit a small one) on the engine, I cannot imagine what the 94 is going to do.
lastly, good luck at the dealership, as was said by someone it just happened to, at the most it will cost you 3500 (I just trust this figure if for no other reason than its what this person with the same exact car was quoted by the dealership)

[Six Speed Turbo]

Hopefully it's not your turbo, and it's the DV. If not...... sorry but now you can upgrade.

[bhvrdr]

I'm another one of those noobs, just out of curiousity, is it impossible for a dealer to simply turn the chip back on if they know the cruise control button sequence?
also people keep quoting magnuson moss but I'm still not so sure anyone I personally know is financially stable enough to prove the dealer and their lawyers wrong in the event that they call our bluff...
that 91 octane and the 93 already put a strain (albeit a small one) on the engine, I cannot imagine what the 94 is going to do.
lastly, good luck at the dealership, as was said by someone it just happened to, at the most it will cost you 3500 (I just trust this figure if for no other reason than its what this person with the same exact car was quoted by the dealership)

No, the dealer cannot manipulate your chip status via cruise control if you have the $59 "lockout" feature. This prevents any switching or light blinking at all until the 4 digit PIN code is entered by the owner. APR also takes steps to use identical OEM outputs in their stock code as well as resets the flash counter/shop code/flash date, etc to OEM or acceptable levels so even those shops that run advanced ID cannot see it (which most dealerships do not even know how to do. I had to show mine).

And, yeah I agree with you on the MM Act. It is fun to quote but be prepared to spend a boat load in litigation and likely lose if you do ever have to take Audi to court. Best policy IMO is to NEVER be "honest" and let a dealership know you are chipped. It is not necessary. If the car is in stock mode it can be logged and scanned just fine. The only reason they would "need to know" you are chipped is so they can get out of trying to get reimbursed by AoA for parts that are failing that shouldnt be. This inlcudes a higher than should be expected number of fuel pumps (they are on at least their third revision), BPVs (again, third revision), and PCVs as well as the campaign on faulty cams. Dealerships need to investigate these issues and not be allowed to immediately play the "do you have a chip" card. If you do have a clutch failure or something likely related to the incrased torque or if you are adding boost controller, nitrous, etc than you should definitely know better than to try and get warranty work on a powertrain/drivetrain component but for high quality chips you shouldnt be blowing turbos or motors. My opinion.

cheers! Mike

[A4Pdot]

YOU GUYS ARE GREAT.... well most of you. Just got a call from the dealership today, they told me that it was a "valve" that is broken. Unfortunately the part is in Germany and I have to wait 10 days. Thank god it wasn't the turbo... well actually after reading all the posts, a new turbo would be pretty awsome. THANKS AGAIN FOR EVERYTHING SOME VERY KNOWLEDABLE PEOPLE ON HERE... except for some I won't call anybody out (CaRJoE0220) peace out

[TJHUB]

YOU GUYS ARE GREAT.... well most of you. Just got a call from the dealership today, they told me that it was a "valve" that is broken. Unfortunately the part is in Germany and I have to wait 10 days. Thank god it wasn't the turbo... well actually after reading all the posts, a new turbo would be pretty awsome. THANKS AGAIN FOR EVERYTHING SOME VERY KNOWLEDABLE PEOPLE ON HERE... except for some I won't call anybody out (CaRJoE0220) peace out

Good to hear! I'm glad it worked out for you. [up]

Did your dealer give you any more crap about having a chip? Did you ever fess up?

P.S. It's KNOWLEDGEABLE [:p]

[CaRJoE0220]

Your Welcome, Glad I could help

[b7cruiser]

YOU GUYS ARE GREAT.... well most of you. Just got a call from the dealership today, they told me that it was a "valve" that is broken. Unfortunately the part is in Germany and I have to wait 10 days. Thank god it wasn't the turbo... well actually after reading all the posts, a new turbo would be pretty awsome. THANKS AGAIN FOR EVERYTHING SOME VERY KNOWLEDABLE PEOPLE ON HERE... except for some I won't call anybody out (CaRJoE0220) peace out

And which valve would that be? Cylinder Intake/Exhaust?

[bhvrdr]

And which valve would that be? Cylinder Intake/Exhaust?

likely the bypass valve or positive crankcase breather vent as was mentioned earlier. if it was a exhaust/intake valve he wouldnt be relieve :) i believe many of these BPV and PCV are on backorder due to numerous revisions due to failures (always nice to do audis r and d). but i'd also be interested to see if that is the case. see if you can get a p/n for them. cheers! Mike

[4-tified]

Ya I am hopping that it's going to be an easy fix, will keep everyone informed. But when the dealer did a quick diaog of the car it came back with no boost at all. Plus I didn't hear anything leaking from a hose, but the power loss was not a sudden "thump" it was a gradual let go. So I am really hope it's this and not that....

Really? So you were getting less and less boost over time?
This doesn't really sound like a blown turbo. A blown turbo is rare, and occurs in drastically over boost applications, which I don't see any of the standard aftermarket software approaching.
The reason a turbo will go is bearing damage. That damage can occur in high boost situations where the turbo overboosts and heats up so much that the bearings give out.

However, what caused your turbo to "blow" if it really did?
If there was inadequate oil lubrication then the bearings will overheat and melt and the turbo will simply seize and stop. I've had that happen, due to an oiling problem on a past turbo I've had.
But, that would happen suddenly.

In another scenario, if your wastegate failed to function during an overboost the turbo would spin crazely and that added heat could fry the bearings. But, that would be a wastegate failure not due to software.
If the wastegate is stuck open, then you would have 0 to little boost.
You know...maybe you have a faulty wastegate? Still, not software related.

A bearing failure can also occur if the turbo isn't getting properly cooled by both the oil feed and coolant feed. If the coolant inlet is blocked the turbo will overheat and bearing failure is imminent.

So, my point is, how would software cause the turbo to "blow"?
I don't see it. I can see how software can cause other issues in engine performance problems relating to timing, fuel issues, knock, etc..., but turbo failure doesn't seem to be one of them.

Your decription of gradual loss seems to imply that it might be a diverter valve that ripped slowly. Or, it could be a wastegate issue.
If the turbo is really seized up, then they need to show what caused the seizure, and why software would have caused that.

I think they may have jumped to conclusions and are just guessing.
Let us know what happens.

UPDATE:
AH! I just read your update, and it's great (well not great but you know [;)]
that it isn't your turbo.
That sucks when a dealer just jumps to the worst and even blames the customer. I'm going to leave my response just because it's great when we can acutally give some answers that do turn out to be true.
Some of us suspected other things besides a "blown" turbo.
Congrats.
Maybe you should also have them check your diverter valve and the PCV as they have been known problem areas with boost performance.
At this point they owe you a FULL diagnostic and TSB service. [up]

[b6onboost]

if its the DV...BPV...you should slap the dealer for saying the turbo is blown.

[killahb36]

thats good news overall A4Pdot,
are they going to cover the cost of replacing the "valve" ?
did you owe them anything?

[EuroB6]

hey Mike, bhvrdr...what ever happenned with your brakes? Did the shop that busted them reinburst you? I know i know, off topic, but it just came to me.

[bhvrdr]

hey Mike, bhvrdr...what ever happenned with your brakes? Did the shop that busted them reinburst you? I know i know, off topic, but it just came to me.

Hey there, thanks for asking bud. I did take them to court and was able to be reimbursed for about 75% of my expenses (due to small claims limits) but the judge ruled in my favor and that meant the most to me.

cheers! mike