Most likely the smoke is from AFT dripping on the exhaust -- only hits the pipe when you are on an incline, otherwise drips on the ground.

The typical leak at that location is the front seal on the tranny, requires removal of tranny to replace, so I'd leave it alone until you need to pull it for some other reason unless it gets really bad.

My 280 does the same thing -- have to put some tranny juice in every couple months.

I'd also check for oil leaking out of the valve cover gaskets -- this will burn off the manifolds at times, especially after highway runs, and smells much the same.

Peter

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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!