I think that you have a worn-out head, maybe with some warping and possibly/probably a head gasket problem. I think your smoke is coming from worn guides and possibly the head gasket. Your low readings on #4 are probably a burned valve. The block seems OK as you got less than a 20% boost from the wet test.

You may well have a vacuum leak, but fixing that is not going to affect the smoking.

IMO, you should remove the intake manifold, but do it as part of the head replacement. Once you get the intake/exhaust off, you are most of the way to getting the head off. While you are doing that, have your machine shop rebuild the new head. Take a good look at the cam sprocket and the other gears that come out and make sure that they are not pointed. Maybe even spring for a new chain and tensioner.

Good luck!

__________________
Chuck Taylor
Falls Church VA
'66 200, '66 230SL, '96 SL500. Sold: '81 380SL, '86 300E, '72 250C, '95 C220, 3 '84 280SL's '90 420SEL, '72 280SE, '73 280C, '78 280SE, '70 280SL, '77 450SL, '85 380SL, '87 560SL, '85 380SL, '72 350SL, '96 S500 Coupe