The smoking effect with cotton is interesting but in my opinion, it just looks like painted cotton. My opinion with dioramas are that they are a limited medium in that they capture a single moments in time and one should try to be too gimicky.
I know I'm sticking my neck out there but this is my opinion.
The best dramatic AFV dioramas are always due to the presentation and quality of the vehicle and its interaction w/figures. I think the Japanese have consistently good published photo spreads of great dioramas. Try sneaking a peak a "Armour Modelling" magazine.
Hope this helps.