The 7M is a noninterference engine... no worries there. I'd replace the belt though. The drift could be due to a few things: Bad timing belt pulley (there are metal guide rings on the pulley which ensure the proper placement. The pulley isn't wide enough to maintain the belt position without them), bent cam drive gear or oil pump gear, worn oil pump drive bearings, or a bad timing belt tensioner, or even just a bad belt.
No, pulling the turbo simply sucks. Drenching the nuts and studs with PB blaster frequently over the period of a couple days often helps, but they still suck. The three nuts whic connect the elbow to the downpipe can be got by working from both the engine bay and from under the car.... I can't remember if it's both of the studes beside the engine or just one of them but one or two are best attacked from below with a wrench, a coupe LONG extensions and a helper to keep the socket on the nut from above.
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