I know some, if not all, wranglers came with plastic valve covers.They leak!!! Get a metal valve cover, I believe they are kinda pricey though but not sure. with it being a 88 you may be able to use a cj,s valve cover as your engine is probably a 258. Its my guess that your leak is coming from the top of the engine as your cloud is probably oil driping onto the exhaust manifold. Others may have better solutions for you.