91 tq wagon smoking

[Watts]

Hello all,
 
I have not been able to get the car into the mechanic for any
compression or leak down tests, but I have done some rudimentary
investigations as follows:
Cleaned a dirty k&n air cleaner
Let it sit overnight, then checked the tops of the pistons which were
dry, no oil, as were the plugs
Took the hose off the turbo, no or negligible shaft play in the RS turbo
(40k miles since new). I have not had the time to pull the down pipe to
check the other side.
The major smoking occurs between 2500 and 4500 rpms, even when the car
is stationary. Put it at 2800 rpm's in the driveway and within 10
seconds it is putting out blue smoke, let it idle and I can barely
notice some intermittent smoke. The head was rebuilt with custom (not
audi) valve guides from 2bennett (37k miles ago). 
Is it possible that the turbo could be the problem even if it smokes in
my driveway?  I am mystified, this car runs perfect in every way (except
the smoke) has incredible boost to 6500 rpm's and above. Any additional
help/comments would be greatly appreciated.
Greg