Hi John, Dad bought a new B414D with BD-154 in May of 1964 and in late July it gave a back fire through the air cleaner and quit and could not be started again. Luckily it was under warranty and IH fixed it. There was either no key in cam shaft or it sheared off. Pistons hit valves etc. We used tractor for another 10 years and put over 15,000 Hrs on the engine without anymore problems. We also had 434 and 384 with BD-154 and put many hours on them without engine problems.
Re, the smoking problem, it is normal for an older BD-154 to smoke a bit if the throttle is yanked from idle to wide open. I remember communicating with you about a month ago, at that time did you checked the hydraulic system for loading the engine? IIRC, I had you check the temperature of the hydraulic pump with your hand.