Here we go again. Its acting up worse this time!

How often has it been driven lately? If it's not very much, that could explain the moisture buildup in the oil. Engine oil has to see a high temperature for an extended period to burn off moisture and other contaminants. Also, if the smoke is blue, it's oil, not water. Oil smoke is blue, carburetor smoke is black or grey and water is white because it is not smoke at all, it's steam. If you simply keep jumping back and forth between guesses instead if diagnosing it properly, you may never get it fixed.