Told him I wanted the engine internals reassembled so that all I would have to do would be install the valve covers, intake , carb, timing chain cover etc myself. I assumed that the internals were all new and gone through.
"blue-printing" the engine is what most want done to their engines during a rebuild. At the factory, (or the engine-builder for the factory) they are mass producing engines, and cannot take the time to make sure everything is as perfect as possible. they get things within a reasonable tolerance, they get things close, and often, that is good enough for most passenger engines to go 100,000s of miles before they fail.
The blue printing typically includes getting things balanced, every single bearing (designed to wear and someday be replaced) actually getting replaced, measured with more accuracy, and assembled with a great deal more precision and care, than was done by the factory. Blue printed engines typically rev higher, produce more power, and last longer than their mass produced cousins.
But when a worn engine is taken to "a rebuild shop" with vague instructions, it may not be treated with the level of care and precision we all hope for. In many cases, their objective is to produce a result satisfactory to the customer with the greatest profit.
If you look at this from another perspective, we can ask what the least amount of work must be done, to get the engine running at factory specs, again. The list can be pretty short, a valve job and a new set of rings, in some cases, not even that.
So in the end, it doesn't sound like we know what level of rebuild was done to your engine. It may be possible the crankshaft and cam bearings were never replaced. It is hard to say without more data.
When you began your post suggesting you have a (I admit I presumed a blue-printed and FULLY rebuilt) engine, acting worn out after only 1000 miles, I think many of us are thinking about premature wear and an oiling issue.
Going from a not-smoking engine to a smoking one in 1000 miles does suggest something in there is worn. Any major oiling issues, or issues where little or no oil flow was occurring, may not even last 1000 miles. It's not a big deal, and I'm not trying to be critical of the OP, or their engine.
The advice I may give for a "blue printed" engine with 1000 miles on it, versus a "freshened-up" engine with (potentially) 200K miles on some of the internal wearing parts, is going to be different.
Unless you find something wrong with your oiling, you may have to live with the engine smoking and the wear. If and when you decide to have the engine "rebuilt" you may want to be clear about what you want.
If you never saw the oil light come on, while revving your engine in a burnout or flooring it up an on-ramp, chances are good you did NOT starve the engine for oil by running it dry. To make an engine wear out fast, requires running it hard and/or frequently with less oil (or old oil) than it needs.
