Help me understand some things about the infamous engine diagnostic...

What exactly is the gas escaping from the top of the crankcase? It isn't all from air escaping past the rings...it looks like the vacuum pump exhausts into the crankcase as well.

What is the white smoke? It smells like oil...is it...or could it be unburnt diesel?

My engine has more than normal white smoke escaping from the top of the crankcase, but passes the 'tea-kettle' oil cap test just fine, even with the plastic oil cap. Engine runs just fine. Does this mean something else?

Thanks,
dd

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'85 300D, 'Lance',250k, ... winter beater (100k on franken-Frybrid 3 Valve Kit)
'82 300D, 'Tex', 228k body / 170k engine ... summer car
'83 300TD Cali Wagon 210k, wife's car