Toyota Repair: Calif*#%&a Smog, incomplete combustion, engine misfire

Question
My 1993 Camry (256,000 miles, automatic trans, 3VZ-FE engine) just failed CA smog.  It measured 159 (@15 mph) and 123 (@25 mph) ppm for Hyydrocarbons and 0.64 and 0.58 for Carbon Monoxide.  It also blows a big cloud of blue smoke at start-up (I think the valve guide seals are going bad) but does not smoke while running or under acceleration.  I am tempted to take the thousand bucks from the state and run, but would like to know what the problem is first.  Any help would be very appreciated.

Answer
The blue smoke at startups is usually the valve stem seals leaking but oil smoke doesn't cause higher than normal HC readings, these are caused by incomplete combustion and some of the unburned fuel is exiting through the exhaust,this is almost always caused by an engine misfire which could be caused by many things from a simple spark plug misfire to something more serious like a leaking intake or exhaust valve.