Your mix is correct.Is the oil made for Pre-Mix? Alot of the oils now are made for injection and won't mix properly.Make sure the oil-injection is unhooked. Possibly the muffler is loaded with oil and needs to be BBQ'd.I always ran my 2-strokes at 1-1/2oz/gal since I ran them hard and never had any smoke,even on start-up.If its' running good,take it out for a long run at decent speed without hills if possible and try to cook the exhaust a bit,see if it clears up.Hope this helps.