If I read that turbo right, it is a 61mm, I wonder if it is realy a 60mm T3/T4 hybrid. A true 61mm will have a T4 exhaust housing. Price is high enough for used parts.
I suspect it may be big on the compressor side and small on the exh side.
The T5 5 speed has a tq rating of either 300 or 310. That 250 will certainly produce that much tq with a good turbo setup. Heck in N/A form , it can make 250-275 tq. Add 10% tq per PSI as a quick reference.
The rear in that Chevy should be a 12 bolt unit. It is plenty strong. To a point.
I'd like to see a Turbonetics 60-1 P trim with a .82 exhaust housing.
You would also do better with a auto trans.
What about this one?
http://www.ebay.com/itm/1986-1987-ATR-TU...d5df9db&vxp=mtr