Thanks for the tips. I pulled the pump out and to my surprise the splines on the coupling bolted to the injection pump are internal, not external as your diagram and my book have it. I could not make out any similar markings or gap in the splines as your diagram shows. I simply put the pump back in but a little lower than I removed it. I then put things back and checked the onset of injection timing. I managed to get it right around 24 deg BTDC.
There is a coupling sleeve over the splines, that connects the pump with the intermediate shaft. The sleeve can be pulled off. The sleeve has the splines on the inside of course.
Maybe I need to go back to thinking about the injectors. I don't have a neat hydraulic pump with a 20 bar gauge on it, so to test the injectors I simply attached them one at a time to the # 1 nozzle and connected a remote starting switch to the starter and observed the spray pattern, force of spray etc; all highly subjective I know, but I would recognize an odd spray pattern or a clogged injector or a leaky one. THey all delivered a small but forceful stream straight down. I caught the fluid in a dish and they all delivered enough fuel to aerosolize a little bit of diesel fuel as the stream struck the dish. I also tested three injectors I removed from a 240D at a junk yard in the same way. They behaved similarly. Am I kidding myself here? Should I buy new injectors or get a hydraulic tester? Any other thoughts of what could be at fault here that is slowly getting worse all the time? After each service I've performed I get marginal improvement but the trajectory of performance is downward.
I hope you mean a 200 bar gauge, because at 20 bar the injectors should not be opening. Normal opening pressure is about 115 bar, lower limit is 100 bar. The spray pattern should be a small closed cone, not a single stream, although some injectors have a pre-injection stream. The only way to properly test the injectors is with a hand pump. There are two ways: either make or buy a hand pump and test the injectors yourself. With the aid of the hand pump you can also replace the nozzles in the injectors, although you need shims to adjust the opening pressure of the injectors. The other way is bring the injectors to a diesel workshop, have them test and replace (if necessary) the nozzles. It is about an hour's work for them.
You haven't addressed the leak of the pneumatic governor. If the car is idling normally (700-800 rpm) than the throttle was screwed back to produce enough vacuum so that the engine doesn't idle too high. That will increase smoke (and fuel consumption).
Smoke out of diesel engines is (if it isn't coolant because of a leaky head gasket) is mostly unburnt diesel. Diesel will not burn because of lack of compression, not enough air, too much diesel injected or injected at the wrong time.
I would probably do a compression test and a compression leak down test to see whether the pistons, cylinders and valves are working properly. It could be that the engine is worn out. The engine has to be warm for these tests.
Diagnosing a problem isn't always easy, certainly not on an old car with neglected maintenance, but take it one step at the time, easiest/cheapest things first, more complicated/expensive things second.