Would Too much oil around values cause blue smoke?

Yes!!! I'm not sure what your situation is, but a common problem, especially in dirty sluggy engines is where one of the oil drain holes in the head becomes plugged causing oil to build up to some level. Often the engine is not level and so the oil builds higher at one end of the head and can build to a level as high as the valve guides. Remember that the intake valve guides are under vacume, and now you have a couple submerssed in oil. Anyway, hope that helps.