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if the engine cant breath it can cause it to smoke as well also check for blow by or possibly a bad turbo. if it was just that one cylinder that was low then it could smoke out of only one tail pipe compared. Also if one of the breasthers from the valve cover to the intake are hooked up incorrectly it can begin to smoke and blow oil into the intake and intercooler pipes
 

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Thanks all, the oil pump being cooked turned out to be one of the main problems. I decided to go ahead and instead of fixing this engine, pulling it and replacing another engine that I have after I rebuild it. Anyone want to buy a engine that needs some work? Ryancft, I bet you're right about the oil coming from the valve covers. I found a few lines that seemed to be in the wrong place.
That can always do it specialy if the pcv valve is hooked up incorrectly.
 

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if a valve cover gasket is leaking it would not be putting oil into the intercooler piping it would be putingit on the cylinder heads and the exauhst manifold most times.Oil get's into the intercooler and piping due to incorrect vacum lines,blow buy,and turbos gone bad. valve covers wouldn't do that.
 
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