Well, possible chain of events:
Intake leaking..gasket eeroded. Slight vacuum leak, possibly into valley. Get on it, pressurized crankcase, finally blew gasket to ooutside. There is a water jacket in the back of the heads. Could have blown out a corner, the boost that was pressurizing the crankcase blew out the leaky spot, blowing oil from the valley and coolant from the passage out. Sprayed on the firewall, dripped/sprayed down on the crossover, lots of smoke.
Loss of power comes from pressure in the intake port blowing out to atmosphere instead of blowing into the head. A % of the charge meant for the cyl blew to atmosphere and you have basically a dropped cyl.
I had this happen to me. The cyl next to the EGR valve was leaking on mine. Ran fine, but when I got on it it felt like a cyl dropped out. And you heard a fluttering "whistle" kind of noise. In checking it out I saw oil sprayed UP the valve cover and proceeded to remove the intake where I found an eroded gasket
Not saying it is your problem, but it very well could be. And Scott, he could have had a loss of power as well. I did.
BTW, a leaking intake CAN milkshake the oil as well. If the car idles OK, I would check for the possibility of a blown out intake gasket before yanking the heads.
