Engine Failure: Smoke and Performance Issues

To start with: I've already done some searching, but haven't found any specific information related to my particular case. I just want to describe the problem or error here.

The system is installed in a VW T3 bus, and the low-level kit (LLK) is not connected. I'm experiencing the typical 'jerking' behavior associated with the 1Z engine at higher RPMs, but otherwise, the engine has been running smoothly for the past 600-800 km.
(it still starts well, despite everything ).

Now, let's get to the problem:

Last week, while driving normally, the oil pressure warning light suddenly came on. I immediately pulled over and inspected the car, and saw that there was a leak coming from the intermediate shaft seal, with oil dripping out.
Towed to the workshop, timing chain replaced, new thermostat, static adjustment, etc.

The engine starts and the vehicle moves.
After approximately 1 kilometer of driving, there is a significant loss of power (approximately 20-40 horsepower) and smoke emission (blue smoke, strong exhaust odor). The engine runs as if only three cylinders are working.
Immediately returned to the workshop; no error codes found in the system memory.

Today I talked to the guys in the workshop.
'Yes... this can't possibly work - the lambda sensor isn't connected - that's why it always goes into limp mode when you give it full throttle.'
Me: 'But I've been driving like this the whole time.'
Boss: 'Besides, it wasn't that warm back then either.'
Me: 'Um... have you checked the EGR valve?'
Boss: 'First, everything needs to be properly connected, including the sensor for the intake air temperature, etc....'
Me: '...and that should be it for now - maybe we should check the compression sometime?'
Boss: 'We don't have a device for that here - let me see if I can borrow one.'

Okay... first, find another workshop, haha, I'm already at that point.

Well, you're not really taken completely seriously as a commercial employee...

Maybe one of you has an idea what this could be?

Hi Wurbel,

I just saw that you're in the LDK area? I've been there a lot recently too; my wife lives (or lived) in Atzbach/Lahnau!

Unfortunately, I don't have a definitive solution to your problem either, but it sounds like something mechanical might be wrong (possibly the fuel injector or fuel supply). Could there be air in the fuel system? Have you tried bleeding it?

Best regards from the coast.
January.

You mentioned that the intercooler is not connected on your car, so you must have connected the hoses in a certain way. Please check the hoses and especially the connections for any signs of oil leakage. Also, try pressing firmly on the hoses; it sounds like you might have a leak on the pressure side. Otherwise, you should do a test drive. If there's a leak, you definitely won't reach the target boost pressures. However, you should definitely install the intercooler and temperature sensor if you want to do something good for the engine; that shouldn't be a problem with this car.
Next, I would check the electrical supply to the fuel injection system. The needle lift sensor could also be the problem (use the search function to investigate).

The matter is resolved for now - NBF!

...besides, I'm now driving a vehicle that is equipped with a 'screwdriver and inspection lamp' .