Blue smoke coming out from back of engine

[dmorgan]

Hi:
My 1994 Mercedes E320 wagon smells like burning oil after driving and I noticed blue smoke coming back of the engine near the firewall. I checked for oil leaks under the vehicle and cannot find the the location of the oil leak and/or source of the blue smoke . Then I did some research on this issue and from what others are saying is that the head gasket is worn out and needs to be replace. Is that true and does anybody has this issue? Comments and/or feedback is greatly appreciated.