1998 Mazda MX3 smoking exhaust

I have just purchased a MX3 1.6 it drives and handles really well but when started from cold billows out smoke. I would say white to grey in colour and there is loads, I can drive 5 miles before it stops seeping from the exhaust. I took it to a mechanic as I thought the head gasket had gone. The previous owner told me he had fitted a new headgasket and replaced the valve seals, also fitted a new cam. The car was leaking badly from the rocker box, which the mechanic has now tightened and sealed, this has stopped the major leak, but it is still smoking. The car is not overheating, not losing any water, drives well, the only other concern is it idles erratically when the engine is hot. The mechanic did not perform a compression test, but told me the head gasket has definately not gone, doesnt know what is causing the smoke, and told me to see how it goes, it could just be oil got into the exhaust that is burning off, other than that he suggested I sell it on before it costs me money, not exactly the answer I was looking for. Has anyone else any ideas what could be causing this, I did notice a little water in the exhaust tail pipe after running for about half hour and some on the floor.