I own several cars of this vintage (ALH engine) as well as a large number of previous VW diesel vehicles.
First on the smoke, one cause not listed is turbo failure. That would cause over fueling, which would cause white smoke.
If the cyl head gasket were failed, causing white smoke, the smoke would likely smell sweet, if there was glycol in the coolant. The coolant level would also be lowering, and might show some contamination.
Earlier VW IDI engines tended to blow gaskets more often, however, I know of NO ONE personally who has blown a head gasket in a ALH engine. They are much more bullet proof in that regard.
To evaluate this car, you need to better determine the cause of the white smoke. While it is true that it can be caused by a blown head gasket, that failure is uncommon on this engine, compared with others assuming normal maintenance and operation.
How fast will the engine turn? If you cannot get it close to redline, perhaps 2000 to 4000 RPM, that would point towards the turbo.
Also, if the turbo bearings have failed, and it is loosing engine oil through them, there may be pooling in the intercooler area. Ingesting that oil while zooming the engine could cause a "runaway" which could cause destruction of the engine. So pop the lower hose off the intercooler to assure that there is not allot of oil there. There will normally be some, but not more than a teaspoon or so.
Also, if the MAF is suspected, you can disconnect the MAF. If it runs about the same, then it is unlikely that a bad MAF is causing overfueling.
I would look at the effluent from the exhaust. If it has fuel in it, then your smoke is due to overfueling, and is likely a turbo which is not working. The turbo can readily be replaced, and is about $560 from places like Autozone. You will pay more if you get higher end turbos. Don't go buying any parts until you have isolated the cause.