Volkswagen Repair: blue smoke for my exhaust, gas milage, head bolts

Question
QUESTION: Can you tell me if the heavy blue smoke coming from the exhaust of my 1994 passat is the valve seals or is their a way to see if it's the the rings. also a very small oil leak coming from above the oil filter, is that some that mount to the engine and is it fix easier

ANSWER: Keith,
 It could be either valve guides, piston rings, or possibly head gasket (including loose head bolts).   The most effective way to narrow down the problem is to do a "leak down" test.  See the article:
http://www.wcengineering.com/articles/leakdown.html

I do not believe the oil filter leak is related.

Rick


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QUESTION: Just one more thing on the vehicle,1994 Passat along with the heavy blue smoke its goes through a lot of gas as well and sometimes the smoke will go away for a short time and then come back very heavy?

Answer
Keith,
 It is very likely the engine is losing compression because of the problems indicated above; this can cause poor gas milage and lack of power.  A "compression check" is easier, will tell you generally if there is a problem and is something you could DIY.  But only a "leak down" test will pin it down to the exact cause(s).  If you have run the engine low on oil, or overheated it, then you may need a general engine rebuild.  Also, depending on the miles on the engine, if you only fix the immediate problem then you may be right back into the engine for more repairs in the near future with related problems.  So again, it may be most cost effective in the long run (assuming you want to keep the car) to do a complete rebuild.  

Rick