Small Engine Troubleshooting Problems? Ask a Mechanic Now.
Sounds like you are leaking pressure and it is not having enough to start the machine. How do plugs look?
Are they black on tips? Is the oil going into cylinder, or is it leaking onto muffler and smoking. Sounds like it is seeping through the cracks you refered to and causing smoke. Normally its head gasket issues, but you seem to have proved that theory wrong already. I would say that your theory is correct by the info given