I would hazard a guess that you have a leaking head gasket.

If the "white smoke" dissapates within ten feet or so, it's actually water vapor caused by water being drawn into the combustion chamber. If you can still see the smoke drifting down the street then I'd be looking at transmission fluid as you mentioned.

The reason I'm thinking head gasket is the low compression in #2 coupled with the "gas leaking around the intake". That sounds more like you are pushing water out through a crack because there shouldn't be liquid fuel anywhere except in the fuel bowls.

The smoke goes away as it warms up due to the head expanding as it warms up. At some point it won't seal anymore and it will blow out the side of the gasket or into another cylinder.

The air from the carbs came from the valve you pushed down to remove the keepers on. You unseated it just enough to let air flow backout of the cylinder. This is the same principal as a leakdown tester uses to find leaking valves. Put pressure in the cylinder and listen at the carb, exhaust and oil filler to help locate bad valves or rings.


Michael

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Usta haves '69 250/8, '76 280C, 1971 250C 114.023, 1976 450SEL 116.033
Current have, 1983 300SD 126.120