1993 300D 2.5 Turbo problems. Help!

[Harrison W]

I recently bought a 93 300D 2.5 Turbo with 110000 miles on it. I've now noticed that the engine has considerable knocking, and smoke at idle. The inline fuel filter was the most clogged i've ever seen a filter before, so I would imagine the main one was shot as well. Replaced both, still knocking, smoke, etc. Also noticed that the inline filter is NOT completely full of diesel when running which seems odd, because my old 300 SDL would have the filter full of fuel. What is causing all of this? This engine starts perfectly in 10 degree weather or even colder, by the way.

Also, we cleaned the engine and the entire compartment at a car wash, (so the engine + compartment was completely wet, could this have damaged electronics?) also had all fluids changed. Before we did this, everything worked just fine. Now the turbo doesn't feel like it's boosting, transmission shifts hard, and there is no AC or air flow through the middle two vents. While we were getting all of the fluids changed, the guy doing it was messing around with the air filter. I know there are a lot of vacuum lines, transducers, and electronics around that area. Could this have caused it?

Where do I even start?

Help would be very much appreciated!