Some comments from my mechanic for the replies above. This is both his and my first time dealing with a rotary so please take it easy

- The smoke is definitely not rich mixture smoke, it's blue and has plenty of oil smell.
- Someone commented that it doesn't look like an OMP problem, is there a way for us to check this and make sure?
- We have checked the oil restrictor but what is crankcase ventilation and how can we check this?
- As for comments about the smoke getting better over time, how long or how many miles would it take? It has been like this for days, each start-up but the car hasn't seen many miles.

 

OMP system can do this is you have the nipples hooked up to engine vacuum and not filtered / port vacuum
( defeats the check ***** for a period after shut down and this may drain a portion of the lines down into the chamber )

crankcase ventilation is VERY important to prevent smoking,, however doesnt usually present as an issue on cold start,, but when hot and when coming off throttle
( the crankcase should be run at a slightly negative pressure with draw through ventilation.. factory method is complicated two way system
.. at hi and low loads it changes direction into the engine either via purge valve or via the aircleaner )

blocking the vent lines will make it backpressure,, and prevent oil draining out of the rotors and out of the turbo
( forcing it instead past seals )

easy test is to take the seal from under the filler cap and replace cap lightly
( this isnt a vacuum but is being sure no pressure will build )

if this slows the issue then you need to revise the ventilation system
a big hp /boost engine will benefit from larger lines to and from catch can .. to aircleaner vacuum

FD engine with single has a convenient drain point ( from ex rear turbo ) to plumb back a catch can drain

if the engine was built ( not a crate engine ) then there remains possibility for placing the direction oil control ring springs on the wrong faces of each rotor.. these are specific for front or rear side of each rotor...
get it wrong,, and the chromes will spin withing the rotor against the drag on the plate and thus will chew up the oil control rubbers..

 

Bumpstart thank you very much for your reply. Lately I didn't have much time to check the forum so I missed your post but I will definitely look into the things you've listed

 

What we have done today is, we removed the turbo to check for excess oil in the turbo but found none. We also checked the ports and no excess oil there either. We tried to check for oil on the apex seals and turn the rotors etc. and nothing out of ordinary.

We then started the engine with the turbo and manifold disconnected (as seen in the video below) to see if there was blue smoke coming out but no evidence of blue smoke there either.

However once we connected the exhaust system back on there was blue smoke (once started to rev the engine). Currently we are thinking there may be some build up inside the old HKS muffler (from previous owner)

Here is the video of the engine running with the turbo and the manifold removed:

Idle Without Turbo And Manifold Video by ALPSTA | Photobucket

As you can see no blue smoke, just sexy blue flames