Gasoline in the motor doesn't really "eat" any seals that would make it smoke. It will however, especially since you didn't catch it early, will REALLY clean things up. You may have had a lot of carbon on the piston, and perhaps even in the rings that may in fact be gone now. Yes, smoking after a problem like this is normal for about the first maybe 30 min of operating. When the oil got thin, it would have been able to bypass the rings, and thus is in the muffler. The backfiring should go away. And you should ALWAYS go to low idle for a few min before shutting down the motor. Make sure the carb is set right and run it. If it doesn't quit smoking, let us know. Lets just hope it didn't damage the rod bearings. Oh, and watch for oil leaks. The gas in the motor may have soaked the gaskets enough to make them leak now. Not usually, but it could happen if the gasket was getting weak/old.
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