300tdi breather filter damaged engine ?

Hi lads, it's been a few years since you last helped me out with some electrical problems on a 90, now I've got a discovery and I think I've damaged the engine..... here's the story.....
We bought a disco 300tdi, we noticed it was dripping a bit of oil, turns out the oil return from the underside of the oil breather filter was venting straight down to atmosphere, and where it should pipe back into the block, that was blocked off, we decided to return it to how it should be to stop it dripping on the floor, we put the return pipe from the oil breather filter back on the pipe that goes back to the block, after a minute we started getting smoke out of the exhaust and it was blowing engine oil straight out of the tailpipe, the engine then ran away with it's self so we stalled the car to cut the engine, upon restarting the car it is now "clacking" quite loudly and is not running well at all, what do we think lads ?
You guys we're a massive help before what's your thoughts on this one.

engine needs a rebuild and a new turbo

Sounds like you pressurised the engine and blew oil through the turbo seals.