If it has a slight bluish tint, then it means that your engine is burning its lubricating oil..
We have a PC50UU-2 which smoked like a barbecue truck when we got it. Definitely "bluish tinge", and acrid - hard on the eyes to operate it with the tail upwind. Also, it was "wet stacking", producing a constant dribble of oily black sludge from the exhaust pipe. It's old, high hours, so we thought "tired engine, loose cylinders, burning oil" and we found a replacement engine block (4cyl Yanmar) with 325 hours on it, in a salvage Kohler 15kVA generator. We had to swap over almost every part beyond the head and intake manifold. This included the injector pump - the "stationary power, constant speed" governor was too "stiff" for a mobile power application. Smoking was dramatically reduced, but not eliminated, and the wet stack sludge is gone. It seems like when it is run at lower speeds, the smoking gradually gets worse as the fuel depletes, and then improves when fresh fuel is added.. but running at higher speeds, the smoke level stays constant. So.. we're attributing this to the reused, original injector pump - we think that it is allowing engine oil into the fuel. At low speeds, surplus fuel is bypassed back to the tank, so the tank fuel slowly accumulates oil.
This all makes sense to us until we check the engine oil dipstick.. which has been rock steady (no apparent loss at all) for months. So, we think we're burning oil from the crankcase which enters through the injector pump.. but it's such a small amount of oil that we can't see it making a difference on the dipstick.
I know this is a thread about hydraulic issues - we had those too, we found a linkage missing from the "stick position sensor" which was preventing the machine from knowing it's stick position (we think this puts the machine into a limited "safe mode" where it can move but not "perform"), and we observed that control response is proportional to battery voltage, which led us to a broken wire at the alternator - fixing that, raising the system voltage from 12 to 14.3 volts made a huge improvement. Anyway, sorry for putting a "mostly engine/fuel/smoke" post in a hydraulics thread.. but all these things are often interrelated..
