When the IP sticks internally, you get this massive retardation and, yeah, you get white or blue smoke. Basically, the IP is either shot or at least stuck internally.
You can:
1. attempt to clean/unstick it using the ATF trick(fill fuel filter with ATF, run for a minute, shut it off and wait overnight, then run it hard.
2. Just plain advance the timing enough to compensate. This works, not perfectly, but it'll get you a decently drivable vehicle if you get things adjusted as best you can.
3. Replace the IP; get something that actually has it's timing 'circuits' working correctly.