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Most cars take about 4 quarts of oil when full oil leaks are 1/2 ounce to make a mess this usually 1500 miles before a leak this size to show a low reading on the dip stick
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I would look for other leaks. If you are sure it's leaking at the dipstick tube, there is normally an o-ring where the tube presses into the engine. In general, this is an odd place for a leak, as ther eshould be no oil pressure in the pan (where the tube terminates) and unless the engine is overfilled with oil, the tube end shouldn't be immersed in oil to leak. IF there is pressure in the oil pan, that generally indicates bad rings. I have seen engines where the oil dipstick actually pops out of the tube under pressure when the engine is running due to pressure in the oil pan from blow-by at the rings.
main and rod bearings; when they wear out enough they reduce oil pressure. replacement of a dipstick tube o-ring is also an indication of a tired motor, especially if it was leaking significantly.
If the oil level goes up, something has to be leaking into the engine oil pan. That would either be gasoline from the injectors or coolant from the radiator. If you are not adding coolant, it could be a leaking injector.
Might you have an automatic transmission? Automatic transmissions have their own dipstick. I don't know about Aussies, but here in the states, transmission fluid has red die added to it to prevent your mixing them, and to tell you whether it is engine oil or transmission fluid that is leaking. If you mix them by mistake, you must drain them and put in the correct fluid, or suffer ruining the engine or transmission, which ever one has the wrong fluid. Your oil light should not be coming on. That is a different problem. Oh, yes. There may be a dipstick on the power steering pump it you have power steering, but it should be really small. (short)
You don't give the make model and year, but I would say you are right in your guess the problem is venting. The hose to the air cleaner could have frozen closed for one example. You could damage the engine bearings and the oil pump running the engine low on oil.
Sounds plausible that if the dipstick housing is broken, has a crack or hole that fluid could come out and drip on the exhaust manifold causing smoke. This works similarly to an oil dipstick, if you check the fluid cold and notice where the oil is on the dipstick then start the vehicle and shut if off and check the fluid again the oil will be higher on the dipstick (pressure).
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