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Fire your mechanic. Then take off the timing belt cover and take a look. The forward cam seals are at the top, the oil pump is at the bottom. But any oil in the Tbelt area should not 'smoke', heat is required to do that.
Look around the valve cover and see if any oil is coming out near the top. That could run around to the exhaust header and smoke there.
The rear cam seals are on the driver's side. The exhaust cam, closest to the firewall, tends to leak when the crankcase is over pressured. The oil then leaks around to the rear and down on the exhaust.
There are 2 parts to the PCV on a turbo, the oil separator under the intake manifold and the PCT which is the vacuum hose attachment just before the turbo. Both of these can get clogged, but cleaning out the PCT is easiest and should be done first.
If the cam seals are leaking a lot of oil, they must be replaced. The driver's side is fairly easy DIY, the passenger side is a bit involved.
Do NOT let this situation go on much longer or you will be buying a new car.
Klaus
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Proud owner of a 1967 220S
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