There are a number of causes for that.
1. Running in a barrel. Forget it, they won't run in a barrel with the hood on.
2. The rubber seal between the inner and outer housings. If bad, it will smother at dockside, but be ok under way at speed
3. Missing seal on top of the water pump housing. Or missing spacer if long shaft.
4. Torn rubber bellows boot on the upper shift rod.
All of the above will introduce smoke under the hood and smother it out.