Thanks for the replies folks, I'll give some more background on the car.

The valves were adjusted before the compression tests. Also, I tried placing oil into one of the low cylinders, and it seemed to up just a bit. I did change all the filters.

I think I have experience to evaluate the car correctly. Let me give a bit of my background: I purchased a '74 240D in Germany at the factory, drove it over there, shipped it here, drove it, sold it 2 years later. In March '06 I decided to find a 220D, and this smoking car was my first venture back with M-B since '76. I have 5 now, 3 are parts cars, one my daily driver, and it starts and runs great. So I do have a bit of experience with these cars, but the idea of removing the head, and going deeper is scary.

Back to the car that smokes. When started, the column of blue smoke out the back is as large are the car! And to start it, you really run the starter for minutes. I did swap injectors with one of the parts cars, and no change for the smoking car, and the parts car still runs fine. (This is a car I purchased for $300, no air cleaner, no oil changes, but engine still has great compression, go figure. The intake area and butterfly were caked with filth.)

So I'm wondering if something happened to the smoking car from running cold. Like carbon on the valves, or on the rings, causing compression loss. And blue tells me it is burning engine oil badly, so maybe the valve seals too?

And in answer to 300SDog's questions, the car is in fair condition. Manual windows, no sunroof, repaint but over dents, a bit of rust, no leaks, rubber mounts including "A" arms replaced. The seller told me it had leather interior, no dents, and smoked "a little". When it got here, it had MB Tex (good condition, but not leather), dents in roof and hood - rust hole in floor - a surprise for me, and the smoking issue that is huge. The seller did give me some money back, but the shipping costs made this a bad deal.

I can't figure out what to do with this engine, maybe swap it for the "dirty" engine with great compression (I drained its oil, put a few gallons of diesel fuel in, pulled injectors, and spun it for a few minutes, let it drain for a few days, and now that thing is clean. But I don't trust it.)

BTW, 300SDog, I tend to agree with you, it is probably difficult to rebuild a diesel block correctly from what I've read. So maybe it was not the cold running that caused the compression loss, but just a poor rebuild.

Thanks in advance for any ideas you folks may have.

Ron