Judging by the wet injector lines and return caps and lines, it looks like diesel to me. It may be time for a return line kit.
How much power it adds depends on what turbo you add. It also depends on whether or not you can get enough fuel to your turbo (this only gets to be an issue if you're going for a lot of power/boost). Will it shorten the life of the engine? The correct answer here is "yes, but..." Yes because , in theory, any time you pull more power out an engine, then it will shorten the life of the engine. Again, in theory, a stock engine will last the longest. Now for the "but..." part. Adding a "stock" turbo, as in a turbo kit that was sold by an aftermarket company like Banks, ATS, Hypermax, etc., won't significantly shorten your engine life IF you keep the EGT's down. To keep an eye on them, you need a pyrometer with the probe installed within 8" of the head. An intercooler makes a huge difference on EGT's as well. Now if you add a big turbo, water/**** injection and a HUGE shot of nitrous like Thewespaul did, an engine just won't last all that long. Especially if you constantly push it like he did. Of course, he was trying to see how far he could push it before something broke.
I don't remember seeing and IDI with two groove pulleys on the A/C compressor and the power steering pump. I just remember seeing single groove pulleys. The power steering pulley doesn't look right. It looks funny (different). Not like the regular ones. The compressor looks like a different one than usually came on these trucks as well. This could explain your belt offset.