Larry

I tend to agree with you. My 300D gets about 28.5 MPG and the 240D gets about 27, over the same roads/conditions. Both use about a quart in 1500 to 2000 miles, and neither leak oil. Both start well in the cold (down to 0 degrees F) but the 300D starts easier.

This is what I've checked on the 300D.

1. Injectors pulled and tested good at a good injection shop.
2. Injection timing adjusted from 17 BTDC to 23 BTDC (spec is 24 BTDC). This made about 1 MPG difference only.
3. Valves recently adjusted.
4. All filters changed (fuel, oil, air)
5. Done the Italian tune up multiple times
6. the fuel is good.
7. No signs of any coolent loss or pressure in the cooling system indicative of a cracked head.

The smoke that seems odd to me is after the engine is hot, I seem to get more smoke at idle. The smoke is grey like fuel, not blue like oil.

Any ideas what to try next??

thanks
Joe