I dunno about ditching the project. Its a real slick car, and is sick if it scoots. I think you have a bunch of stuff for it now that are still good. I don’t think you would make out any better by ditching the project and starting another. I say new shortblock?..maybe longblock? That is real messed up that the thing didn’t run more than like 10 hours for each incident. I went on a few is300 forums, other people are turbo’ing this car without problems…variables or not I wouldn’t let “your” mechanic put his greasy mits on that car again! Couple of runs and turbo blows, couple of runs and engine is shot…damn, WTF. It sucks that there are engine problems, I worry about your tranny, I thought that would be the issue. contrary to what I just said, I would be a shame if you got the engine finally reliable and boom goes the tranny/rear end.
Good luck Dos, hope what ever your decision is goes well