Jon,
It would help if you could take a photo, load it into Paint, and add an arrow showing where the smoke is coming from.
I can see the high end of the exhaust manifold getting hot. Several A4 owners have rerouted the coolant hose to go from the t'stat outlet to the LOW end of the manifold, forcing air and water out of the high end.
If you have a heat exchanger, it should NOT be getting hot enough to smoke!
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