Quoted From moparfan:
It
did you happen to pull the oil fill cap off while doing the smoke test? just to see if the smoke is getting into the crank case.
I would do this, or pull the oil dipstick while it is running to see if there is any vacuum in the crank case.
Sounds to me like worn valve seals which would cause oil consumption and a lean condition. But I know very little about ohv engines.