No, wastegate works perfectly, since you have full boost (and then some) with the actuator control line clamped shut.

What you have is a tired control spring -- it's too soft, so that the wastegate opens to early, restricting boost.

There have been several posts on what to do about this, from just adjusting the spring to replacing it with another controler with an external adjustment.

What you want is NO MORE than 13 psi (you can get more, but engine reliability goes down fast with more).

Worst cast you will have to remove the turbo and take it to a diesel injection shop and have them replace and adjust the wastegate controller spring.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!