The engine is finally purring like a kitten! Unfortunately I was distracted with many other projects, so it took me a long time. I fixed the valve, gave everything a thorough cleaning, replaced all the belts and filters and set the injection timing. The timing should be set at 1mm +- 0.02mm on this engine. I was showing 0.40mm- No wonder it was smoky. All I have left is a little more brake work and then an inspection. Thanks for the help everyone.