My guess is bad valve seals. I had a Suzuki with this problem (endemic in the 1.3 Suzuki), and it ran great aside from smoking on startup, fouling plugs every now and then, and using a quart of oil with every other fuel fillup.
Are you getting a lot of smoke on startup? Does it look blueish? Smell like straight fuel or fuel mixed with oil?
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Whoever said there's nothing more expensive than a cheap Mercedes never had a cheap Jaguar.
83 300D Turbo with manual conversion, early W126 vented front rotors and H4 headlights 400,xxx miles
08 Suzuki GSX-R600 M4 Slip-on 22,xxx miles
88 Jaguar XJS V12 94,xxx miles. Work in progress.
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