Even with a two stroke excessive smoke is a sign of a tired and worn engine. Although from my recollection the old DT yamaha's always seemed to smoke more than others.
Your comments are confussing but typical of many I read, "I know it's running an bit rich...." . Running rich should only refer to the air fuel mix, it should not refer to the oil to fuel ratio you are running in the bike.
If you are referring to the oil mix ratio being more than recommended, ie 20:1 compared to 30:1 then you will be actually running your engine leaner in the air to fuel ratio department (more oil in the fuel leaves less fuel molecules per air molecuels which result in a lean condition). Not good for engine component longevity particually in the hot area.
Your point about piston /ring clearence is probably more than likely the cause of the excessive smoke. Wear of the rings, piston and bore allow blow by which can cause the excessive smoking.
Have a look at most of the two strokes that seem to be in good engine condition or freshly rebuilt and are tuned right at the next meet and you'll notice once they're warmed up and going, they hardly blow any smoke, this is because the oil stays where it's suppossed to, and that's down around the bearings and the rings and pistion skirt areas, not up in the combustion chamber.
I'd suggest a top end rebuild and as long as the motor has not been modified greatly, go back to the manufacturers recommended oil / fuel mix ratio and revisit the carby jetting to make sure it's as close to standard as well.