Tear that down to the block with the crank/rod and piston left inside it. Flywheel still attached and pressure wash and clean.. All that junk is now in between the valve stem and guide. The guide wears out and the valves start rocking back and forth. Then the vacuum sucks oil through the guides and it smokes. Very Very badly. Run a soft barrel cleaner through those guides. Get it all spotless clean and re-assemble it with a torque wrench. Don’t think it’s to far gone I have been and will continue to run worse.