I'll have to check out your design Rj. Sounds interesting and something I might want for a shop. Am thinking of doing oil changes soon for friends at my home shop, I should have more oil than I can use if I do that. Plus a couple extra dollars. Better than free heat, get paid to heat!!
As for that drip methode I mentioned. Not sure what went wrong for you guy.
Simplest way is to slowly drip oil onto redhot coals. Results in clean burn and lots of extra heat. If you boil engine oil it will thicken and sludge up, perhaps you were getting it way to hot. If you drip it onto unburnt cold wood, it won't burn as well.
If you first burn wood (or coal) and get some really hot coals, then just slowly drip a few drops of oil onto those coals it should burn clean and very hot! You are using both wood heat and oil at the same time. The one I mentioned did not use any preheating for the oil. Just sit a pot higher than the wood burner, run copper tubbing (with a valve to control flow rate) to the top center of the burner, drip oil onto burning wood coals slowly. If you got a oily mess, my geuss is you either driped faster than it was burning, or the coals were not hot enough to burn it. Also why you might have gotten sooty smoke.
Kinda like burning plastics. If you just light it and let it burn you get soot and trash, toss it on red hot coals you get super hot fire with no soot. I don't recomend burning plastics, just an example. I have experimented though and got clean burns and super heat from garbage bags, grocery bags and packaging, and even those foam meat type trays. Buy clean burn, I mean no visable soot or trash or nasty left overs, could easily be toxics in the fumes, so I do not recomend burning plastics for home heat!