Gen 3 – Can a cylinder 2 misfire cause smoking?

Thanks in advance for reading!
Stock 2009 Outback XT 5MT, less than 6K miles after new turbo/engine.

What happened:
Driving home from work, 70 mph accelerating to 80 mph. Just as I was getting close to high boost I felt a noticeable hiccup, the CEL and “S” (sport mode indicator) were both flashing. I was exiting the freeway and when I stopped at a red light there was a very noticeable error and the car almost stalled. I limped it home and left it idle (roughly) while I went outside and took the hood off. After a few moments, white smoke started coming out from under the car. I immediately shut off the car and crawled downstairs. The down pipe / mid pipe was smoking (almost like steam?) and I could hear what sounded like boiling liquid coming from the exhaust. The code reader gave a P0302 cylinder 2 misfiring.
Also, no visible fluid or damage that I could see.
Coolant temperatures did not rise above normal at any point.

Question:
What could be the cause of “boiling”?
I thought it was the 2009 EJ255 that I was sure (was) from the head gasket issues, but it sounds like it might be?
Has anyone else experienced something like this?

Very upset if this is a big problem, already over $10k in repairs last year so not expecting much more…

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