possible severe engine damage - would appreciate diagnostic advice

[Jaxonalden]

Reading what you wrote and not having an audio clip, this is my $.02;

1. The smoke at start-up is normal.
2. The burning smell...stray cat?
3. Clatter sound, do you have a mechanic's stethoscope? Looks like a doctors but has a rod on the end. If you can get your hands on one...start the car, crawl underneath and start probing to isolate where the sound is coming from. I'm hoping its the water pump impeller coming apart (water temp never climbed above average?).
4. The fact that you drove it and it still idled fine doesn't sound like something terminal. You might want to pull the front access cover and check your pulleys and the water pump at the same time.

Good luck and please let us know what you find. If you find a mechanic is going to break if off in your backside with an outrageous cost, have him prove whats wrong first.