Hi Busters, I think this is an over fueling problem , judging by the black smoke. I think I would be pulling the fuel injector out and doing a spray pattern/pop pressure test on it.
Some Lister engines have a deliberate over fueling option for cold starting, this should be disengaged immediately the engine is running. I don`t know if this applies to an LT1. Please see the attached photo of my SR1. As the lever is, it is in run mode, you push the lever down to cut off fuel to stop the engine. To cold start the engine pull the lever up until it is in the vertical position.
Hope this helps.
Bob