[molehole]

Sounds to me like the vacuum modulator crapped out in the transmission. When it goes transmission fluid is burned out the exhaust which may explain why you failed the smog test. Transmission fluid is probably in your oil so have the modulator replaced or at least looked at and change your oil and you'll be on your way. Modulators are a very common problem and are relatively inexpensive even with labor like 130$$ or so. Good Luck