looking to buy an x5, found a nice one, but lots of smoke after hard acceleration

[Rev Engineer]

I'm on the hunt for a 01-02 X5. I test drove what appeared to be a nice one at the local BMW dealer the other day. After running through the gears in sport mode and later coming to a stop, there was a ton of smoke coming out the tailpipes - the nice sweet smell of burnt synthetic motor oil. I cautiously made my way back to the dealer and the smoke appeared to have mostly gone away. The dealer I was working with wasn't too up on the X5 (he was from the MB side of the dealership), but thought it might be the oil separator issue. I thought this might be the case too, but after reading through this forum, I'm not seeing anyone report the same symptom - lots of smoke coming out the exhaust after driving the vehicle somewhat hard.

Everything else seems in order and I'm pretty interested in the x5. Since it's a bmw dealer, I can probably work out some up-front repairs before I make the purchase. Can anyone clue me in on what the problem is so I can more intelligently negotiate with the dealer? As an FYI, I do plan on having the x5 inspected by an independent shop, before I cut a deal. Funny thing is that the dealer said that a previous guy had gone through an independent PPI, but later had the financing fall through. A little fishy since I uncovered a fairly major problem after a basic 15 min test drive.

Any advice would be appreciated! I'm really looking forward to getting and X5! I'm generally pateint so I can walk away from this one if it's prudent. I plan on going back to the dealer to get the service history and talk more about the smoke problem, but it would be great to get a little advise from this group before I go back.

Here's a few more details on this x5: silver on black (the color combo I like the most), very clean inside and out, 123k miles, cold weather package (big bonus), tow-package (bigger bonus), no squeaks or rattles, from the driver's seat everything appears solid and in-order. They're asking $12,900.

Comments!?