Here is an article about cavitation. In simple terms it is the wearing away of the cylinder walls from the coolant side, not the piston side. At some point, enough is worn away to allow coolant to "flow" into the combustion chamber:
Cavitation,_SCAs_and_the_Proper_Maintenance_of Diesel_Engine_Cooling_Systems
How does the "smoke" smell? and what color is it? You need to rule out head gasket failure before you assume the worst.
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1994 F-350 7.3 IDI Turbo, crew cab, E4OD, LB, Dually, 
ATS Turbo upgrades: 3" DP with 3" exhaust Magnaflow XL muffler: Pictures Here
1997 Jayco fifth wheel 323 RKS, Robins 16K dual axis hitch
Apillar pod with: Autometer C2 Series gauges: pyro,trans, boost 
Hypermax Cowl induction, Flex-A-Lite 26K tranny cooler w/fan
K&N air filter (we'll see in a million miles) 
Tekonsha "prodigy" brake control
Train Horns: Pictures here
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