seal and valve job for 1999 s80 2.9

[volvomans80]

I have a 1999 S80.
Body and interior is in great condition and it would break my heart to scrap it.
Although oil level in engine is good, I hear clacking.
Exhaust throws out a thick blue smoke when accelerating but barely noticeable when not accelerating.
When I start the engine, the blue smoke is overwhelming.
I used a No-Smoke product by Wynn for the engine and now it seems worse.
Not very mechanically inclined but I think I need a valve and/or seal job.
Was hoping to drive this car until October 2012 when the new models come out.
How should I repair this problem?
Should I have the valves and/or seals repalced or should I look at either replacing the engine or replacing part of the engine with a rebuilt part?

Thanks,

Volvomans80