I had the same issue about 10 years ago. I had 2 (TWO) engines done at the same time, and each smoked like hell. Have to add that up to that time I was over quite a few successfull rebuilds with perfect results. I was very determined to find the problem. Took the engine apart at lest 20 times. Realy. Took the shortblock to at least 5 machine shops, finally even to a university. No success. When I finally put seals on the exhaust valves as well, the smoke nearly dissapiered, but not completely.
At the end I removed the shortblocks and had them rebored at another machine shop, and all of a sudden the problem was gone.
Neither me, nor anybody else could tell what was wrong with the first company's work. The bores were round, straight, the honing was done to a good surface standard, gaps, cearances were all in spec. And still.
I have spent about 6 months to solve the problem. It was the worst time of my professional life ever.
Sorry if I cant solve your problem, but maybe... You need to do the same: find another company and get the shortblock done again.
