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Tim the Taxman,
With the oil consumption rate you cited, you should see quite a bit of smoke when the conditions for burning the oil occur. I am curious, does the car burn more oil at rest than under load? Meaning, when you are idling or coasting, does the smoke seem thicker? Or is the smoke worst when you are pretty heavy on the throttle? Oil smoke is usually blue but if you have an unusually high consumption event, it can be white. Black smoke is usually unburned fuel.
I would look for ways to get oil into the combustion path that does not involve rings or valve seals. In a Diesel, the intake manifold rarely sees a vacuum (which is why Diesel engines have vacuum pumps), so the conditions on gas cars that link valve seals and oil consumption are not quite the same on Diesels. Seal leakage on Diesels usually leads to a build up of carbon deposits on the back side of the valve poppet. Eventually it leads to seating and clearance problems, which show up as hard starting and low compression.
I am always a little amazed at 20 year old cars with a new 22:1 to 24:1 compression ratio that can generate over 350 psi in a compression test. One atmosphere is 14.7 psi, so 22 times that is 323 psi and 24 times that is 352.8. According to my engine manual, the engine is "ok" as long as the min and max values are within 45 psi or so, and no cylinder is below about 221 psi. And turbos have about an 18:1 ratio with the turbo "at rest" which is usually the case when taking a compression reading. It seems to me they should be about 260 or 270 psi.
Anyway, if you have really solid starting and running in all weather and are also smoking and consuming oil, I would be inclined to think you might have a vacuum pump diaphragm, or other vacuum connection that is drawing oil into the engine. If the vacuum pump diaphragm fails, the oil consumption at idle or when coasting can be spectacular, as well as ominous. If it is leaking but not completely ruptured, it will also provide a good leak rate, directly into the intake manifold via a long white translucent tube from the front, lower driver's side (USA) of the engine to the intake manifold. This line will be dark or black instead of the translucent white when all is well if there is oil inside it.
There may be some other vacuum and oil combinations that can lead to sucking oil into the intake, or some other issue with a leak path to either manifold through a bolted connection. So, before I would go as far as taking the head off or something else to check the condition of the cylinders (which I would do or have done before I junked the engine), I would check the connections to the intake and exhaust manifolds, the vacuum lines and then remove the air filter and housing to get a visual inspection of the intake manifold. Engine oil is black and is very obvious.
If you suspect the shop you took the car to did not actually change the valve seals, I think you should get another shop to do a compression check and give you a call on the state of the seals. They might also be more capable of identifying the path your oil is taking to being liberated from the engine, as well as what is causing the smoke. Good luck, and I hope this helps, Jim
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Own:
1986 Euro 190E 2.3-16 (291,000 miles),
1998 E300D TurboDiesel, 231,000 miles -purchased with 45,000,
1988 300E 5-speed 252,000 miles,
1983 240D 4-speed, purchased w/136,000, now with 222,000 miles.
2009 ML320CDI Bluetec, 89,000 miles
Owned:
1971 220D (250,000 miles plus, sold to father-in-law),
1975 240D (245,000 miles - died of body rot),
1991 350SD (176,560 miles, weakest Benz I have owned),
1999 C230 Sport (45,400 miles),
1982 240D (321,000 miles, put to sleep)
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