The red circle outlines the source of the smoke.  The wire to the bottom fuse from the starter solenoid to the fuse for the horn relay was fried.  The metal connector had touched the firewall.  You can see the scorch marks.

Fortunately  only the brown wire for the horn was fried.  I ended up replacing another wire too that had some insulation scorched.  

This make-shift emission control hose from the valve cover had vibrated loose and oil was splattering onto the smoldering wire!