Okay ;
assembling the piston wet is the problem here, coupled with (I'm certain) the wrong initial breakin regimine is what's causing this .
My self I'd take it apart, clean the piston, rings and cylinder bore HOSPITAL CLEAN AND DRY then reassemble it, make darn sure the timing is dead nuts to the "T" mark, fire it up and hold the throttle so 3,000 RPM as you watch the second hand of any analog watch / timer / etc. actually SLOW DOWN (yes, it seems this way as you newly rebuilt (!$!) engine is howling away) for SIXTY SECONDS NO LESS , then shut it down and take a break, it'll be hot as blazes so DO NOT re start it until the next day, it should fire right up, clean out some smoke then run as clean as it did when new .
I am fully aware this takes a HUGE LEAP OF FAITH so don't do it is you know beyond belief I'm crazy .
This is how Bell Textron breaks in is new helicopter engines, BMW breaks in their new car engines with fully synthetic oils and also how HONDA breaks in their C.A.R.T. racing engines, a friend of mine used to build those Honda engines in California .
It took me several years and many engines before I decided to try this and I was certain I'd fry the new pistons, rings and cylinder wall but it didn't s I've been a fan of this method ever since . no need to hone it either ~ I typically have an old cylinder that's within spec. but is glossy like a mirror, the rings bed in in that initial 60 seconds and I've never had a comeback yet .
This is a true "HAIL - MARY" only to be tried if you're willing to gamble making it worse .
Just a thought from some random guy on the internet you don't know for what that's worth .
Gotta follow the steps *EXACTLY* tho' or it won't work .