if the smoke is kinda white-ish and smells funky i would think that might be burnt coolant??? im not very much into diagnosing problems like that once they get beyond the simple answers which you seemed to have already taken care of.

perhaps you need a new head gasket if the CR of each cylinder is different and if indeed you are burning coolant your gasket is shot! and it would be necessary to get a new one. i would probably do that anyways as i think yours probably has never been changed. also on the tranny thats a 3speed auto if i remember correctly? those things are dirt cheap i would assume since theyre old. u can probably pick one up from a junkyard somewhere or get one rebuilt or the likes for 150-300. they shouldnt be much since its older and all.

135k isnt actually much for a toyota engine. well i dunno about the carbd engines but i know the fuel injected ones from around 80-on are usually good for 200000-300000 miles if kept in good order.

good luck. and if u need help doing labor i can help