engine running to red line and unable to "kill" by turning off key

Sounds like the engine "ran on oil" when the turbo failed, was the engine low in oil or did you see a cloud of smoke out the exhaust? I haven't heard of turbo failure on your engine perhaps check on line VW or VW turbo diesel forums on line. There is a professional service called Identafix. http://www.identifix.com/info/about_us.htm They only deal with professional repair shops. They are in the Minnesota 651-633-8007 begin_of_the_skype_highlighting 651-633-8007 end_of_the_skype_highlighting. Your auto repair shop do all their diagnosis tests, and discuss your problem with a team of professional technicians great service cheap and very bright people.If the repair shop that are repairing your car are stumped this is a great service. This company only deal with automotive repair shops and don't answer questions for the general public but are an amazing knowledge base.

you had a "runaway diesel". Diesel mechanics know what this is. Happened to me on an isuzu diesel years ago. Scary, apparently a vacuum develops that sucks diesel fuel into the cylinders - and won't stop even when ignition turned off.