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Blue smoke indicates oil. Running fast is idle adjustment or vacuum leak. A float set extremely low can cause fast idle but not smoke too. I would also suggest, from your description, you have other issues. Is the base gasket on correctly, vacuum connections, breather?
 

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Actually when an engine is running extremely rich it will exhaust blue smoke with a distinct gas smell just like the op described
Partially or un-burnt fuel will result in a black exhaust emission. Blue smoke = Oil and White = Coolant (steam). Of course the colors are subtle and I agree your nose is often a much better indicator when it comes to determining if your exhaust emissions are the result of fuel, oil, or coolant.

Certainly residue and the smell of gasoline in the engine compartment is cause for major concern. Had a customer with a very similar situation. Ended up he had connected the crankcase breather to the intake manifold which resulted in a high idle and blue exhaust emissions. ;)
 
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