doesnt smoke bad, only at WOT and its just enough to notice, but imo it shoulnt smoke at all, and i think there is something up with the motor since its getting 2/3 the gas mileage it should get... only about 270-280miles on 9 gallons....so yeah i heard that you have to time the injection pump or else the motor wont run right but niether of my vw books have ANYTHING about diesels and i dont have any idea how to do it, i can time the crap out of a gas motor though so i just need to be told how and i have no fuel leaks, new fuel filter, and new oil and oil filter...so its gotta be a pump issue
Based on the above, I would set the timing and adjust the valves, then go from there. You do need special tools to adjust the valves although I've never done it...search around, there's gotta be some info.