if its still running the t2 turbo then this will be the cause of the smoke as the zetec oil pump runs at higher pressure than the cvh 1 & due to the design of the oil return t2s are prone to failing as the oil pressure is to much for the sealing ring. even if itsa t3 this could still be the cause.
as for compression, did you do a wet & dry compression test as this would tell u if the problem was the head /gasket or the rings.
have the valves pressure tested to make sure they are sealing & get rid of the decomp plate as they are wank!