It was probably pulling oil from the valley, not an uncommon problem in a Cleveland. Use the turkey pan with an 1/8" ring of high quality sealant around each port on both sides of the pan and you'll never have that problem again.
Thanks for mentioning that. I posted another thread a while back about this and a few people suggested the engine might be sucking oil from the lifter valley. I talked to a guy in my Mustang club who insisted that wasn't possible. (I should listen to you guys and not him!)
I've gone round and round with what intake gaskets to use. Some say always use the turkey pan. Some say never use the turkey pan. I assembled the engine using the Fel Pro performance gaskets and I don't think there were any leaks. However, shortly after driving the car I discovered I had a wiped cam lobe. I used Edelbrock gaskets when I replaced the cam and those were leaking. If a Cleveland can in fact pull oil from the lifter valley into the intake ports, that would explain a lot.
I have a new set of Fel Pro performance gaskets I'm going to use for this job. If I get the oil/smoke issues again, I will try the turkey pan option.
BTW, I bought a can of Permatex "The Right Stuff" to seal the front and rear of the intake. I used that spray can once and, when I tried to use it again, nothing would come out. Then the spout broke off and now it's useless. The last time I bought a can of that stuff, it quit working after a few days. Man, I hear that stuff works well, but at $27,00 a can, it shouldn't break! (OK, end rant.)