Assuming that the turbo is not spinning while the truck is running, the
problem is YOU NEED a TURBO. It should spin any time the truck is running.
While the truck is off, pull the breather hose off and make sure that the
turbo can spin freely, it should. There may be some in and out play. A
"little" is ok, but  more than about 1/8in is going to show wear will be an
indication that seal are in need. White smoke usually goes with this as
well. White smoke shows your burning oil.

Depending on how your truck is set up, most of your fuel may be set to come
in with the AFC. It fuels, based on the boost pressures. No pressure, no
added fuel no power.
I have my truck set up this way. It helps to limit smoke and makes smother
power.

The turbo air has two functions;
  1) provides "air" for combustion
  2) provides cooling air for the cylinders

SO, you can melt down if you have "enough" fuel without the cooling volume,
but with enough to burn the most of the fuel(means it will be most likely be
smoking out the tail pipe). Temperatures can easily reach the melting point
of the pistons(over 1500F). Regular road cruse temps are around 700-900F.
MELT DOWN does not make a sound as the truck dies.

One thing that could have "killed" your turbo, is not allowing shut down
time. From 3mins to 30seconds is all it takes to cool down the turbo before
shutdown. It depend on how you were driving just prior to shutdown. Oil will
burn and coke around 400F. IF you work the truck and quickly shut it down,
the EGT(Exhaust Gas Temperature) could easily be in the 600F range. Oil
would coke and clog the oil line that would lubercate the turbo. This would
at some time kill the turbo.

MY 2cents, if your turbo is fried from the lack of lube as described above.
Get a hybrid HX35/40 turbo which will provide more air quicker than your
HX-35. Then get on the forums and start on the path to the dark side
(bombing)<learning to add hp to your truck>

IF your going to keep the truck, get some gauges(EGT and Boost Pressure) at
the least. You can make 400hp, easy without harming mpg. Many times the
upgrades will add up to 2mpg.

Their are a couple of wonderful forums;
http://www.dieselram.com/cgi-bin/ultimatebb.cgi
http://www.dieseltruckresource.com/