Originally Posted by LUVMBDiesels

First off, get a MitiVac or similar vacuum pump gauge combination. Mine even can blow air out making it more versatile. Next hook the gauge into the vacuum line going to the transmission. Tee it into the line just past the white valve on the injection pump and see how the vacuum fluctuates during operation. You will need about six to ten feet of vacuum line to go from the place you tee'ed into through the window and into the cabin so you can look at the gauge while driving. Search the site for the proper vacuum levels.

If the vacuum is not right, replace the valve and all the hoses and fittings.

For the smoking issue take a look at the ALDA (square metal thing on top of the injection pump) if you can see a screw on top and not a black plastic cap it means that somebody has adjusted it already and probably made the fuel curve richer. You can try turning it 1/4 turn clockwise to see if this helps, but remember smoke is not a bad thing

I would get the valves adjusted regardles as they need to be done about every 15000 miles and I bet yours have not been done in a long time. When I bought my 300SD the valves had not been adjusted in years!

Do some more searches on this site for vacuum settings, ALDA, and valve adjustments. The information is out there, but you have to mine it.

Good Luck!