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Not sure what year or model you are dealing with, but you may find this link helpful. http://volvospeed.com/vs_forum/topic/159754-how-to-replacing-1999-vvt-engine-cam-seals-and-setting-timing/
I wouldn't run the engine if I knew the cam was off 2 or 3 teeth and would sort out your timing issues before addressing the smoke issue.
I would also get a cam holding tool that you know works. Sounds like that may be part of your problem.
Why do you think that the oil cooler is causing the exhaust leak?
Take a step back and maybe start over. Sounds like you may have a few things going wrong.
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"Differences of opinions should be tolerated, but not if they're too different' - Sharon Craig
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