That thing is blowing oil. Ko4's are pretty reliable turbos but there have been a few cases of people blowing them up prematurely, even a few cases of instant fail after installation.
Those start becoming inefficient around 22-24psi on a twin turbo setup. Im running 20 on mine now, and its spiking to about 22. No smoke here.
So doesnt 16-18 seem a little high for a single ko4?
http://i111.photobucket.com/albums/n130/sflemon/failcomp.jpg