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Smoke emanating from beneath and other things.

For the past couple of months my 87 5kcst has been smelling like burned oil
after a run.  The hydraulic pump was leaking quite a bit and I thought that
the dripping Pentosin was blowing back onto the cat converter creating the
smell.  I fixed the pump and low and behold the smell is still there and
getting worse to the point of smoke rolling from under the car.  Upon closer
inspection I found what appears to be a leak from the transaxle sideplate on
the drivers side.  The underside of the transmission from the side plate
back is washed clean from leaking oil.  All sideplate bolts are tight.  This
is a front drive transaxle not a quattro.  Questions: How are the sideplates
sealed?  Are leaks of this type common?  Is it repairable without major
transmission teardown?  Is there some other common leak source that may be
masquerading as a sideplate leak?

The other thing: I have been getting intermittent check engine light
indications.  If I read the codes right they tell me the knock sensor or
wiring is bad.  Can anyone tell me where the sensor  and associated wiring
connectors are located?   Neither Bentley nor an under hood inspection have
made the location apparent to me. 

Thanks in advance,