It did seem to smell like oil smoke rather than steam from the coolant, but from what I could see with the heatshield in place the solid metal pipes to the turbo looked very corroded.
I'll check out that pipe on the header tank, I had the same problem with my Quantum kit car. There is a small water leak from somewhere up front and the heater doesn't work, plus the gauge is showing that the engine seems to be running very cool (about quater way). I suspect the thermostat has been removed or is jammed open.
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