1995 F-250 7.3l diesel, 146,000 miles. Oil leaking into fuel

Just got it at an auction and found out that the guy had a tow truck take it there because he didnt want to drive it( I wonder why?). Well.I ended up knowing the guy that owns the towing business and found all this out after the sale. Checked the oil before it was ever started when I bouthg it and it was full, so were all the other fluids except the radiator fluid wasnt all the way full but still had a safe amount. It ran great for 150 or so miles, then wouldnt stay started almost like a clogged fuel filter. Replaced it to find out that the fuel wasnt all fuel. It looked like there was oil mixed in with the fuel so I checked the oil and it was completely dry. It took about 4 quarts to get any reading on the dip stick and 8 quarts to fill it up to the full level. My question is how is my oil all being taking from the engine and being mixed with my fuel. It also smokes alot like its burning alot of oil wich makes sense since im basically burning a mixed gas form of 15-40 and on road.