First off...your AAZ is a IDI TD motor (InDirect Injection), not a TDI (Turbo Direct Injection). You'll find further help and more information on your car/motor specifically over in the "IDI Engine" Forums.
On your specfic problem. It sounds as if the turbo has gone south and the oil seals have gone bad. That is quite characteristic of the problems that you are having. You can't be absolutely positive without removing the turbo and disassembling, but a good indication is the "burning" off oil that is occuring as well as the "Puffs" out the tailpipe.
Its common to find a bit of oil in the intake track (between turbo and intake manifold, or in the intercooler tubes/pipes if you have it intercooled) but alot of oil is another bad indication. Also, it could blow oil through the turbine/hot side of the turbo as well...removing the dp could give you an indication, but more than likely most of that oil is going to already be "burnt" up.
From there...you'd move to other problems such as valve stem seals, rings, etc. but given the number of miles on your cars original turbo vs. that on the actual engine itself. I'm lending towards the turbo.
On the old IDI TD i had in the GTD, I had a t3 blow its seals and it blew small particules of oil onto the hatch (after a week of driving) as well as made some major smoke in 1st and 2nd until it burnt most of it up.
Replaced the seals...no more problems...
Joe