1990 Volkswagen Golf Ticking and smoke

I have a 1990 VolksWagen Golf GL 1.8L that has been giving me this ticking noise since I bought the car which was only like two or three weeks ago the sound seemed to becoming from the valves but I took the entire head apart and moved the valves put the head back on without the cover and the sound went away now when I did that I figured the sound was gone so I put the cover back on and put the car back together now I have smoke coming from behind and below the valve cover or head and the ticking noise has returned any ideas???