Volvo Repair: 1987 240DL White Smoke! Chugging!, spark plug wires, engine wiring harness

Question
Since almost November 2007 I have had my 240 into the mechanic 4+ times each time the costs racking up and repeatedly no resolution.  First we replaced all belts and seals. Then we replaced spark plugs because we thought that maybe the missing and the chugging was due to miss firing. Then the Distributor cap the rotar cap all of the spark plug wires.  Then the Fuel relay under the passanger side of the dash.  A new fuse casing for the fuel fuse by the battery.  The car drops zero fluid the transmission was rebuilt in 2006 the oil is changed regularly every three months.  The temp gauge works.  The most current issue the vehicle was given back to me on Jan 24th after the fuel relay was replaced the car was good for about two days and then it began chugging again on the 26th and shortly (less than an hour) after the chugging in stop and go traffic I came to a stop went to accelerate made it to second gear and I heard a loud pop and the cab of the car filled with white sweet smelling smoke I pulled over it was coming from the engine compartment and the rear of the car.  The muffler was hanging disconnected and again no fluid.  It would not turn over and there was no increase in engine heat.  My mechanic called he says he was able to turn over the engine without issue and aside from some chugging in 1st and 2nd he's stumped.  Help.  Do I shoot it and put it out of its misery or are we possibly overlooking something?

Answer
Lisa. sounds like you need to shoot the mechanic.  Did he do a compression test?  Was the Air Mass meter tested?  When does this happen?  warm or cold?  These are the kinds of things I need to know to be able to help you properly.  What is the condition of the engine wiring harness?  Roger