Need your help
 

I bought a 1987 N/A 944 about a month ago and have had no problems with the car until now.

I was making a right hand turn yesterday and noticed my power steering had given out. I was about a block from my house and continued to drive home.

Everything seemed fine just no power steering. I came to a stop sign then turned left and noticed the engine became much louder and felt somewhat sluggish but was not giving it much gas. I got the car home and opened the hood. There was some minor smoke coming from the area pictured below. My serpentine belt was no longer spinning, and I checked my power steering fluid and it was low. I topped off my power steering fluid and messed around with the serpentine belt. The pulley that seems to move the belt has a lot of play and seems like it maybe has come loose. The motor is much louder now. The car starts up fine. Before this all happened I did start to notice when I would start the car, it would jump to 1000 rpms then all the way back down almost to a point where it was going to stall and then back up to 1000 rpms and then back down and eventually settle out and idle correctly. It did seem like the motor was developing a slight tick before this also. But the car does start and does drive. Just no power steering and feels sluggish and the motor is much louder now. Any insight is greatly appreciated.

I added a video of the car running and point to where the motor was smoking.

http://www.youtube.com/watch?v=pTd17SClpwA