The smoke you describe sounds like valve guide oil seals which are not easy to replace on the M110 engine.
My wife had a 81 280SEL for 13 years (1985 - 1998) and it gave a little puff after decel all its life. If your oil consumption isn't high I wouldn't worry about it.
Timing is critical for that engine to get power. I would experiment with higher settings since you have good gas.
Since I have lived my whole mechanical life at sealevel I can't say what to do about rejetting and adjusting for altitude, but I know that it can be done and is being done. The action of the secondaries is complicated and in constant need of attention on those carbs. Calibration of the secondary air valve spring tention is most important.
Bosch Master, ASE Master, L1
33 years MB technician