'87 260e no start..help!

[Urquattro]

This morning I tried to start my '87 260e and it wouldn't start. It will turn over fine but won't start. After trying to start it and I let go of the key, it kind of "bumps over" just one more time by itself (like "dieseling" except not as bad, if that makes any sense). Also, when I opened the hood, I noticed a faint bit of smoke coming from the big air filter housing.

It was running flawlessly two days ago when I drove it, and showed no signs of anything going wrong, so I'm absolutely stumped.

I'm at work right now, so can't really do any hands on until later, but does anyone have any idea as to what could be the problem?

Thanks in advance for any advice