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How is the running quality of this engine? Does it start, idle, have normal WOT power? Do the needle adjustments seem in normal range? Perhaps water is getting into the powerhead somehow causing the smoke. You mentioned that this engine has a fuel pump, any chance it is leaking fuel into the powerhead?
These engines are pretty tolerant to most everything, and continue to run pretty well in spite of wear and other issues….Using a hotter plug seems like a band aid, unless you are running in very cold temperatures, or idle the engine extensively.
Have you tried a different fuel tank/supply? Perhaps the owner is buying lousy fuel, water is separating out in the bottom of the tank.
Seems like you sold the engine a few years ago, perhaps it just needs a thorough tune up…