there should be on difference in what you wrap. i do not think the filter is having something to add to the smoking. the aluminum tapes glue/adhesive may be smoking. you need to address the nichrome wires current draw. if you remove the current...then the smoking stops, correct? then that is the source of the smoking. so, if that is getting too much current, it will overheat the wrap and cause the smoking. could be the silicone tape, the fiberglass, or the adhesive on the aluminum tape.
how is this set up for when you have to change the filter? do you have to remove it all just to change the filter? if so, then i would say you should look into another heating method. i am not familiar with the fattywagons suggestion, but if its smoking, its not good. can you post a pic?

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1980 300D