I would be inclined to look at the modulator hose since he had a smoking problem with the old motor. When you rebuilt the motor, were the exhaust manifolds full of carbon and oily looking? And don't always go by the color that someone says is coming out of the pipes..... a lot of people cannot distinguish between grey, white and blue smoke. And running rich... isn't always black !!! I had a Mustang once that had a bad injector that was flooding the engine real bad, you could smell the raw fuel and the smoke was white, just like coolant !!!