Chevrolet Repair: 86 Chevy Caprice, chevy caprice classic, side exhaust manifold

Question
I have an 86 Chevy Caprice Classic V-8 305 engine. My problem is that the other day when i was driving i couldn't get over 55mph then when i got home and tried to drive the next day i couldn't get over 25mph and when i press the gas it seems like it strains to get to the 25mph but won't go over that. i popped the hood and when i look at the drivers side exhaust manifold i can see oil leaking from it plus some smoke and i was wondering would the cause the car to get low compression like it is getting or could you give me other pointers about where i should look?  

Answer
1st of all are you sure that it is the engine causing this and not the transmission ? Does the car seem like it is running on all 8 cylinders ?  If you put the car in neutral does the engine rev the way it should or does it have a miss or stumble, I need a lot more info to be able to help you more but if the engine runs ok you may want to look into a possible transmission problem