Turbo, intercooler, oil leaks, and other problems, where should I start?

Hello all!

Let me start at the beginning. I have a 2000 1.8 Liter Turbo Beetle. It has 122,300 miles on it, and it runs, but it's sluggish. It leaks oil and I have to put about 1/2 quart in each week. I took it to the mechanic because it seemed like I had to push the gas pedal down further just to get it to start going. It's also getting like 22 miles to the gallon

My mechanic said that the Turbo was bad, the intercooler was cracked (the turbo and the intercooler are where he said most of my leaks were), I needed new valve covers, I needed a new intake, new o2 sensors and something about expensive hoses. My Check engine light will come on, but when I top off the oil it seems to turn off again. Recently, the airbag light came on and the ABS and traction control lights are on, and when I check my oil, it looks like there are bits of something in the oil that sometimes come out on the dipstick. Pretty sure this is all bad stuff.

If I said any of that wrong, it's probably my misinterpretation, because I don't have the sheet of repairs in front of me. Before anyone says anything, this is also a mechanic that I've used for all of my cars, and I trust what he says. I thought about taking it to a dealer to have it diagnosed, but if I spend a few hundred dollars on that, that could be a good chunk of the parts I need to buy.

So here I am starting at square one. I have found some parts at local junk yards with warranties that I'm strongly considering. I want to do the work myself, but I don't know where to start. I also would appreciate any advice you have to verify any of these problems. I'm not sure what I can do to verify that things need to be replaced other than take it apart to look at the parts, but I'm game for doing that. I also hear that I need to change the oil when I replace the turbo.

I'm stuck between a rock and a hard place here. I've been driving the car - since it's my only way to get to work - adding oil, getting bad gas mileage, and not a lot of power, but I wanted to get into it and try to start fixing things this weekend. I don't know if it would be a good start to drop and clean the oil pan out so it doesn't run this contaminated oil anymore and risk damaging the base engine, or if I just shouldn't worry about that until I fix everything else.

I really just don't know where to start so any advice on what to do or where I could find parts would be greatly appreciated. Thanks!