I had a head gasket go on my Ford Fiesta once. Lot's of oil, water, a bit of petrol and some blue air from the language I was using but most of it was situated in the engine bay. Mind you, when it went I was generally too busy looking out the front and wondering what the **** had just happened than looking out the back wondering why I couldn't see any smoke.
What would be sweet is wastegate burnoff. That's not an official suggestion because I know it's been said many times already. But it would still be sweet.
And anyway, smoke is pretty cosmetic atm and so is an extensive damage system. Get the racing dynamics right and then I'm sure lord scawen will turn his attention to a ground breaking, comprehensive, innovative and godlike damage incorporation method.
I for one am not worried.