Could be. Is your foam compartment seal around the engine intact ?  Those engine fan are heavy duty "suckers". They will pick up ANY fumes that run loose in the engine bay.

Here's a complete exhaust system for you: http://www.busdepot.com/details.jsp?partnumber=071251053EK

I got the muffler kit you suggested Russ.  Thanks.  It just showed up.  Not very sexy! 

My last ride in sweetpea was smokey!  Blah!  After crawling around on the ground again I noticed that there was a thin coat of oil all over the heater boxes and on the muffler.  There are actually two gaping holes in the old muffler, and the smoke that was rolling out of it is oil that is burning off at the holes.  The oil level isn't dropping, yet it looks like everything down there is oily!  It is all burning off and getting sucked into my ventilation.   Let's hope replacing the muffler does the trick.  I think I am going to get a CO detector to put in the bus! 

Alright, I'm open for another suggestion or two! 
I replaced the rusted out EMPI exhaust with the stock kit that Russ suggested and it was a great improvement in sound, feel, pickup, etc...  It is amazing how much better it runs with the stock exhaust!!  If anyone is on the fence, for what it is worth, I am now a believer!  Thanks for the nudge Russ!

However,
My problem of a smokey interior is still there!!  Maybe not as bad, but it still really fills up the cab after a half hour of running.  I had hoped to take her on the road for the holidays but I don't want to kill my family.

Everything is oily, but overall it is not loosing much oil.  I'm pretty sure it is just burning off and the smoke is getting pushed through the vents by the blower.  From the outside, there doesn't appear to be any smoke, but it sure is there inside!  Blah! 

Anyone else have this problem?

You might ck the heater box tin right under the valve covers and see if it is rusted out or split open at the seams  If this is the case and you have a valve cover or push rod tube leaking, it will drop oil right into the heater box then to the vents. I have seen this happen before even on Type-1 engines. One other place is the small heater control box , the one with the cable , if it is just sitting on the main heater box and you have the leaks , it will suck in fumes. They are suppose to be sealed and clamped tight.

Thanks for all your input guys!  When the spring/summer came, the problem miraculously disappeared...  with the heat exchangers wired shut!

With fall approaching I want to get a head start on this problem because I have a number of cold weather trips planned.  Here is what I have done so far:

New OEM exhaust
New engine tin gasket
New valve cover gaskets

The problem is still there and it maybe worse.  Smokes up the cabin. 

I think there must still be oil in at least one of the heater boxes and it is cooking off.

Is there any way to really inspect the heater boxes without pulling the engine? 

Sweetpea is a '79 but I don't see any '79 heater boxes listed at the major online parts suppliers...  Advice?

I'm going to try this one more time. Pulling the boxes can be a bitch on a lift much less on the ground. Try this , pull the engine tin on the bottom covering the push rod tubes.(easy) Go to the car wash and clean around the tubes, block, boxes really good. Let dry and drive it around and see where the leak maybe or place some clean paper under the engine overnight after driving.