Chances are it is a small and cheap fix..... I suspect that the rubber diaphram in the transmission vacuum modulator valve has gone bad... If that is the case that would cause oil residue in the tail pipe and bad smoke since now you are sucking tranny oil into the intake manifold and straight into your exhaust manifold.
ChopTop250 - you nailed it. $45 for modulator diaphragm and it runs pretty good (just need to get MFI tuned up). I suppose I owe you something for this; I was so frustrated I was going to dump the car for $1,000!