[thanks to Jeff Clinton for the news tip!]
The Tobacco Smoke Enema seems to have had some popularity in the mid to late eighteenth century. It's hard to source this one because dozens of websites and blogs use the same exact wording:
"The tobacco enema was used to infuse tobacco smoke into a patient’s rectum for various medical purposes, primarily the resuscitation of drowning victims. A rectal tube inserted into the anus was connected to a fumigator and bellows that forced the smoke towards the rectum. The warmth of the smoke was thought to promote respiration, but doubts about the credibility of tobacco enemas led to the popular phrase “blow smoke up one’s ass.”
The Wikipedia claims a book by Eric Burns, The Smoke of the Gods as the source of the quote and photographs, however that book doesn't actually say that this contraption led to the phrase. That book says "To blow smoke up one's ass. Today it means to compliment in a crude and obvious manner; in the past it meant to cure in a manner even more crude."
A simpler, more portable device: A: Pig's bladder; F-G: Smoking pipe; D: Mouthpiece to which the pipe is attached; E: Tap; K: Cone for rectal insertion. Medical monograph of 1773. Reproduced in The History of Cardiothoracic Surgery from Early Times
The Tobacco Smoke Enema was just another of the many hundreds of quack medical devices contrived over the years, often involving magnetics, the healing properties of copper, machines to jiggle pounds off, all of which ended up being just about as effective as blood-letting. There days all our miracle cures are not mechanical, but pharmaceutical.
This image (or other media file) is in the public domain because its copyright has expired.
Cassell's Dictionary of Slang claims that "to blow smoke" as an older phrase, from the mid-19th Century or later, and the phrase "to blow smoke up someone's ass" dates from the 1950s and is a modern addition to the older phrase. A related (and great) phrase, is used less commonly: "blowing sunshine up your skirt."