I think you mean crankshaft bearings. Did you pay attention to the oil pressure gauge? How's the oil pressure now?
When there is too much oil in the crankcase, the problem is that the crankshaft dips down and whips air into the oil. Oil with air bubbles doesn't lubricate as well as regular oil, nor is it as easy to pump through the engine. There's no way to get rid of the bubbles, except to change out the old oil with new. Your dealer did the right thing.
The smoke was probably a result of oil getting into the egr system which then passed it through the intake and subsequently burned the oil.
Keep all receipts to document this incident, should you find problems in the near future related to this incident.
95 E320 Cabriolet, 131K