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Worn/damaged oil control rings will still allow an engine to produce good compression pressure, but allow oil into the combustion chamber to be burned. Loose intake valve guides could also cause oil to get sucked into the chamber. Make sure the oil is fresh, and of proper viscosity too. Old gasoline thinned oil will enter the combustion chamber much easier than brand new SAE30 oil.
 
Be sure your breather is assembled and working properly. Check the reed valves for condition and proper seating. If engine is equipped with a dipstick, check that the rubber seal is in good condition, sealing not only the tube ID but also around the dipstick. These single-cylinder engines rely on crankcase vacuum produced by piston motion and breather reed valves to assist in oil control so make certain that there are no air leaks.
 
I have a gravely with a kohler 181T. It has 120 psi of compression but it smokes like a freight train. What could be the cause of this?
Lots of good suggestions on here. I have one, try adding about 2 ounces of a product called, "Engine Restorer" to a fresh oil change (probably uses 10W-30) and try it for a while. I do NOT typically believe in all the oil additives that are available now. However, I have seen this product STOP oil consumption and smoking in automobile engines several times. I am sure NO additive will 'cure' any real mechanical problem but, as I said, I have used it and have seen it work in the past. Just a suggestion. It would not cost much to at least try it before embarking upon a rebuild or something.
 

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