My 85 failed smog last week also and it was due to oil burning that contaminated the catalytic converter along with a bad EGR valve.
The engine is a two year old rebuild I bought from eBay for $1100.00 delivered to the driveway and when one buys a cheap engine, one has to expect it to NOT last long at all and mine didn't. She was down on power, up on fuel and oil consumption and failed smog, what would you do if it was yours?
I'm almost done putting the top end back together after degreasing and thoroughly cleaning the head inside and out, de-carboning the combustion chambers that weren't all that bad and cleaning those valves.
What was the major failure that caused a Gross Polluter rating from the Commiefornia smog test? Cheap, lame, inferior valve guide seals that are made of Buna N rubber, it is not tolerant of petroleum products nor can it handle hot/cold cycles from engine running under normal condition and then cooling overnight. The rubber fails, oil enters the combustion chambers through the guides and doesn't burn, it just messes up the catalytic converter.
The EGR valve being bad didn't help either but, I knew it was bad and then forgot about it because the truck still ran.
The intake valves had the beginnings of a build up of unburned oil and the exhaust valves had a glass on the faces and more on the seats I removed with a wire wheel and brush.
The passage to the EGR valve was partially clogged so that got special attention and a used but, still good EGR valve was applied.
The head is back on the engine and things are coming along nicely all so I can continue to drive my 32 year old Yota.