Hi Lancer,
No matter how you disable the EGR system, you will have a check engine light. Most people disable it by disconnecting the MAF connector, and the vehicle drives normal (actually better) but you do have the idiot light. That can only be avoided through electronics (GDE tune, SEGR, or some are now getting into custom modding their ECU tunes). So yes, if you install the kit you will get a CEL but that's not really the fault of the kit, per se. Make sense?
Your second point has been a point of discussion for CRD owners for a long time. My answer, which is a 2-parter:
1) EGR Valve as turbo surge protector - technically, the turbocharger is a VNT, it uses variable vane technology to regulate boost. There is no wastegate. The EGR valve is not used as a wastegate.
2) Flow Control Valve as runaway engine protector - This is debatable. It's primary functionality is to increase the amount of exhaust gasses through the EGR system and into your engine. It robs power, and dumps soot into your engine. That's BAD. It's secondary function is as an "anti-shudder" mechanism. When you turn your key to OFF it momentarily closes, and then re-opens. The idea is that the engine will shut down faster. But myself, and other LOST members, have experienced no noticeable difference with the valve installed and uninstalled in this regard. As far as a runaway engine goes, the valve only closes momentarily upon shut down (key OFF) and then re-opens almost immediately. This may not be enough to stop the runaway engine feedback loop caused by your blown turbo. I have seen only ONE thread about an actual runaway CRD - and guess what, he had a fully functional flow control valve in place. And he had known for a while his turbo was going south (smoke out the tailpipe and lots of shaft play). Go figure.
In BOTH scenarios, we are talking about a catastrophic failure of your turbocharger. In scenario #1 your turbocharger veins have locked up and your turbo is at maximum boost pressure. In this case the EGR may be able to bleed some boost off, but it may not. But your engine will be running noticeable bizarre and you will investigate and discover your issue.
In scenario #2, your turbo seals have utterly failed, and engine oil, having the same energy content as diesel fuel, is entering the combustion chamber and fueling combustion without the presence of diesel fuel (key OFF). This is a rare event. There have been many, many, many diesel engines produced over the years that do not have protections for this circumstance. Again, this is a rare event. If you regularly check your turbocharger for shaft play and keep your engine oil clean and topped off (and change it every now and then...) you should be able to catch any issues before they become catastrophic.
You have to weigh this unlikely scenario against the alternative 100% guaranteed scenario of EGR Soot entering your engine and destroying it over time. Also, your flow control valve, which is a fairly complex electronic mechanism driven by gears, will eventually fail and you are stuck with the $300-$500 bill (just the part) to replace if you want to retain its functionality. A lot of guys just remove it and call it a day.
The kit has other benefits as well, such as:
Increased power
Better fuel economy
MUCH easier glow plug access
No more boost leaks from your intake elbow gaskets (there are several) and EGR tube connections.
Eliminates intake soot
Prolongs engine life
With all that said (whew) I do understand this product is not for everyone. But those who have purchased it so far (and they are selling like hot cakes) are giving it great reviews - throttle response being the initial first reaction, with other long term benefits as covered above.
Thanks for your question,
Seth