It sounds as though your headgasket has failed. Am I correct to assume that the smoke you are seeing is white? I bet that if you were to take compression readings cylinder #1 would be significantly lower than the other three. One of the 'textbook symptoms' of a bad headgasket is oil mixing with coolant and vice versa. Check the coolant expansion tank and the dip stick - the latter may have a build-up of rust or a white frothy substance which is created when coolant mixes with motor oil.

If memory serves, there is a section of the 700/900 FAQ (accessible via the pull-down menu at the top of this page) which addresses common headgasket failure modes and repair.

You will want to have this fixed as soon as possible so as to avoid further damage to the engine (if it overheated, the head is likely warped).