I had my Volvo XC90 serviced in March, and now its blowing white smoke. Shouldnt the ServCenter have caught this last month??

I had my car serviced at Bavarian Motors in Philadelphia in March of this year. Several
things were repaired including brakes, wipers, and sunroof. Still, the check engine light
was one and I was informed that this was because of a oxygen sensor (?) of some sort
that needed to be replaced. I opted to wait until i had more income (2 months or so) to fix
that. Fast forward three weeks and my oil light comes on during a drive from DC to
Philadelphia. Said there no oil... I had the oil changed in late Nov of 2013 so this seemed
weird. Made plans to have the oil changed the next day; went to my car bext morning and
billowy white smoke poured from the exhaust pipe. It moved, but was a little jerky. Called
a tow truck, had it towed back to Bavarian. They preemptively say they believe it is the
turbo. Shouldnt they have caught this issue during the last diagnostic? If they didn't,
why? Should i have to pay for another diagnostic procedure if I was here just last month?
The tow truck driver was assured it was a blown head gasket or cracked head - and that I
should go to his shop for a $2000 repair. Who is bs'ing me?? Cause I am pretty sure
somebody is. I don't trust these guys...