The only place the oil can come from is the rotary valve shaft chamber seals that are facing the cylinders. If the engine sets for a while, like a few days or a week, the oil seeps in and causes the engine to smoke on start up. Depending on how bad the seals are determines how much it smokes on start up. I have heard from some members that removed the engine and re-torqued the engine case bolts, and it solve the problem. Most likely the seals are bad and need replacing which requires removing the engine and splitting the cases to get to the seals on the crank. It's an involved project and might be cheaper in the long run to just replace the engine.
Karl