Look at the exhaust pipe -- if it is liberally coated with soot inside and has a ring of fresh soot on the outside, you are definitely running rich.
Several possible causes -- improper adjustment (check engine light should be on, but not always), leaking fuel distributor, blown EHA, restricted fuel return.
If this started when adjusted, it was done wrong. It's fairly easy to check, get a multimeter (the on currently on the forum is a good one) and set if for duty cycle. Take the cover off the diagnostics connector on the drivers side fender (it screws on) and put the red lead in hole #3 and the black in #2. With key on and engine not running, it should read either 70 or 80 (depending on computer). Start and let the engine warm up. Duty cycle should float around 50% with some variation. If it reads 50 all the time, the O2 sensor is shot, if it reads 97% or 30% the mixture is so far out the computer cannot control it. Mine read 38% steady when I started working on the rough idle.
You can adjust it with a 3mm allen wrench if the adjustment port is open on the fuel distributor, or have it done by a reputable shop.
If you smell gas in the oil, it's likely not just a mixture problem, though -- you are pouring a huge amount of gas in there and need to get it fixed pronto. Oil diluted with gas won't provide adequate lubrication and you will wreck the engine from lubrication failure.
I suspect the white smoke you see is actually oil smoke from overly thin oil going down the valve guides at idle.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!