It sounds like you are having an issue with the blow off as
@HHGadget stated. But we have to remember that you have an LE5 (essentially) so your boost is not controlled by the ECM. It is either being controlled by the wastegate spring or the boost controller.
I think you had stated that you are using the wastegate spring to control the boost. I am not sure how you have the wastegate plumbed. I would imagine the vacuum line is attached to the pressure side of the turbo. You should also have a BOV that is connected to the pressure side of the turbo and also to the intake manifold. When a BOV is functioning properly it is not going to allow the pressure in the charge system exceed the pressure in the intake manifold. This will happen when you let off the accelerator because the throttle plate closes. The turbo doesn't have brakes in it, it keeps on spinning and building pressure. This will cause a pressure difference between the charge system and the intake manifold and the BOV will open.
I am wondering if the BOV is getting stuck open and the reason why you are not able to build boost. The turbo would be spinning as if it is building boost and the ECM has been programed to expect a certain amount of air going into the engine and it's not getting there. That would be the reason why the ECM is going into limp mode.
I would look at your BOV and make sure it's not sticking. It could be getting stuck when the BOV has to open up all the way which would be when you have the accelerator pushed down pretty good and then you let off the accelerator.
Pull the BOV out and take it apart. Be careful as there are springs inside of it. Check the piston and make sure it is able to move it's full range without getting hung up at all.. Also read up on how to adjust it.
What is the make and model of your BOV?