That looks rather nasty. I've no experience with turbos, but I assume that much erosion is abnormal and is definitely caused by the water?
Obviously the blade speed would be highest at the outer edges which would explain why the damage occured there. If somebody clever could think of a way to focus the water droplets towards the center of the turbine, would that reduce the problem? Perhaps it would be possible by mounting the jet axially quite close to the turbine, or something like that? Always easy to speculate when it's somebody else who has to do the work and foot the bill.
