dealership has given me an estimate for $10k for a new engine and a new turbo...

What is your question?

...but they claim they do not know what exactly caused the failure. After much back and forth I finally was able to get a copy of the diagnostics report which shows an error code of P0012. Please help! I feel like they are trying to scam me into repairs that are not needed. Vehicle was experience lack of acceleration and had a loud tick coming from under the engine. Oil levels were full upon drop off but engine sludge was present due to a faulty turbo (which has been well documented across multiple sites and from Mazda). Please help!