Here's my take on this:
- The prime reason causing turbos to blow is that the rotor spins at a very high speed (as much as 30,000rpm) when under power. The spindle is supported by a film of oil pressure, not bearings. When the engine is turned off too soon after running at a significant RPM, the oil pressure disappears and the spindle, still spinning at a high speed, has no support causing it to seize.
- It is possible that the poil cooler only serves to cool the turbo oil supply (which gets significantly hotter than the crankcase oil because the turbo body thru which the oil passes gets really hot) before returning it to the crankcase. It is also possible that the cooler is clogged with oil sludge (poor maint) and this is possibly why the second turbo blew as well.
- When the spindle siezes the rotor touches the housing and the blades snap off. The exhaust blades are probably stuck in the exhaust mixer or water lift. The intake impeller will end up either sticking in the intake manifold or will go thru to the engine. If this had happened, there would some unwelcome noises coming from the engine.
- Converting the engine to non-turbo has one expensive problem if it is to be done right. Turbo engines are designed with lower compression ratios than naturally aspirated engines with the turbo boost lifting the compression ratio to same-as or better with "charged" air. So without a turbo the compression ratio will be such that any tiredness in the engine over time will eventually make it imposible to start. You will also get sedentary performance at best - lazy, smokey and thirsty. The only way to overcome this is probably to replace the pistons and there may even be cylinder head variations so it could get really expensive.
- The pump and injectors will probably have a slightly different spec but that's not a huge expense can be re-tipped and calibrated.
But I agree with SteveInMD, the efficiencies and benefits of small turbo diesels are considerable and if the old parts are still around, I would restore it to original. Even if they aren't it may still be the more affordable choice.