Make sure the K&N fits properly. I have seen numerous filters with bad fitments allowing dust particles to bypass the filter and erode turbo vanes. None as bad as yours however.
2007 WK CRD QDII, GDE HOT tune. 275/55/18'' on Sahara's, SRT8 suspension.
2000 Jetta TDI (hers)
2006 Liberty CRD (sold)
3 VW TDI's (sold)