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My money's on this is going to be a settings problem. Someone's messed with either the (timing), and/or (fuel delivery). I agree the 2cycle oil is not going to (cause or fix) the smoking symptom. And the O.P. should run it on straight diesel until this problem is diagnosed. That being said, I do...

As I said before, you need to check the timing and see if someone has advanced it. here's a quick video showing how it's done. https://youtu.be/GMev83skH6M I also agree too much 2cycle oil could cause the smoke. I run 1quart per tank and it runs much smoother and quieter with no smoke.

My M1028 has a banks turbo, thus the fuel is turned up and it doesn't smoke at all. Sounds to me like either the fuel mite be turned up too far, or the timing is advanced a little too much, Or maybe both? Check your timing marks on the front of the pump.