Don't jump to conclusions yet about the head-gasket although it is a possibility...

Smoke could be:
1-Transmission overfilled draining through the vent on the exhaust ..check the level.
2-Valve cover towards the rear of the engine leaking oil down on the exhaust
3-Head-gasket as they do leak in that corner, also down towards the exhaust....

Degrease the engine big time...and drive it for a while......you would be able to see the location of the leak....in reference to your other question, the heads don't usually crack, and seals don't usually wear on the m104, unless horribly abused.....

good luck

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1993 300E, 2.8 M104 .....