Blue smoke on trailing throttle and after sitting at a light is diagnostic for bad valve guide seals. A pain, but not really horrible on that car.

Can cause oil consumption as high as a quart in 1000 miles above normal, too, maybe even more. Likely if the cam oiler fitting were broken, it needs guide seals.

Check the plugs, too -- if one has significant oil ash accumulations, you may have a guide loose in the head (I've seen this on a cast iron block M117).

Transmission fluid smoke is white, and a blown modulator will make it shift funny as well. It stinks something horrible, too, not like burning motor oil.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!