Hey, so I just got a #20 head installed on my 87 300d and got it running. It starts easily and idles well once its warm. Car runs great when driving, turbo spools well and makes good power. Alda needs adjustment as its a little sluggish off the line.
Now the problem is that after it sits for awhile(overnight) it smokes pretty bad on start up and continues to smoke until I give it heavy throttle and spool the turbo, then there is no noticeable smoke. Oil level was down about 1/2 quart in a hundred miles. I attributed that to new filter, 12 new lifters and a dry cylinder head.
Does this sound like turbo seals? Valve stem seals?

One other quirk is the temp gauge sometimes pegs out on cold start but after a little bit seems to drop and read accurately. Bad sending unit?