To determine the source of the oil in the intake track, take off the hose that goes between the turbo inlet and the VAF. Look in the metal inlet tube to see if there is oil running down toward the front of the inlet tube. I bet there is some there. This oil is picked up and gets distributed throughout the inlet manifold and eventually will cause the puff you see just like a valve seal problem. If the new seals were not installed properly, they could be torn when installed but a good mechanic should have done it right.
To solve the dripping oil problem described above, Ford wants you to change the valve cover to an obsolete unit not available. (See TSB 87-11-10) This new cover requires the use of a different oil separator unit. This pair is supposed to reduce or eliminate the oil being drawn into the inlet system.
Oil in the turbo inlet "may" be promoted by an early design valve cover and oil separator, but I've seen and owned XR4Tis with the original valve cover/breather design that never showed more than a trace of oil at the inlet.
Before looking for the redesigned top works or building a breather/separator, be sure to make sure your PCV valve is sealing tight under boost conditions and the breather separator is not gunked up or saturated.
The XR4Ti application is considerably more demanding than a regular PCV vacuum modulating system. In our cars, the PCV must also serve as a check valve and prevent any air flow from going the wrong way under boost conditions.
If the PCV leaks, air will enter the crankcase past the PCV. Where will it go? The breather/separator is the only open vent, so the air travels "out" the breather inlet...along with any oil vapors and oil splash in the valve cover.
Another thing that can aggravate this system is a dirty, oil saturated breather filter/separator. This black can with bronze mesh inside is intended to condense any oil vapors present and let them drip back down into the engine. If the mesh is dirty saturated with oil, it doesn't do a very good job and oil vapors pass right by. Where? Into the turbo inlet where they then condense back to liquid.
Clean the breather with a solvent. Most experts here on the list believe the OE Ford PCV valve is the only one that works. When you get the part, open the box and blow into the valve. It should be very free flowing one way. The other should not leak at all. If it does, in a very humble voice as to try another. Keep saying things like, Merkurs need special parts, the counter guy will understand.
Air Oil Seperator I just made a separator from a quart paint type can. Two metal tubes, 1 long & 1 short. Fill can with steel wool and hook it up between the existing old oil separator and the inlet tube fitting. This eliminated the dripping. Mine still smokes a little on startup since it has 130,000 mi on original valve seals.