Spent a couple coolish days on the boat and think the mystery is solved. Turns out I do not think it was smoke now at all. I think it was condensing water vapor.
Since I had no smell of exhaust the other day when the cabin filled with smoke I ran some tests the last couple of days.
The air intake for the non-combustion side I intentionally put in a damp area that is not a living space. The idea was to pull damp air from that area, shove it through the heater and kill 2 birds with one stone.....move some damp air out of one of my locker spaces and keep the cabin from becoming too dry when heating from very cold temps.
The bow of the boat has a vent over the v berth that can not be closed. Boats by law in many places have to have non-closable vents.
Yesterday I ran the heater in the boat and very carefully watched for any signs of smoke from the output. I kept my eyes glued on the end of the duct until the unit brought the cabin up to 20C from about 10C. Not once did I see smoke. Then I looked forward and just in the area of the V berth I saw a haze. I went forward and there was no smell at all and I saw the haze got thicker as one got closer to the vent at the bow (pointy end). I also noted the V Berth was still rather chilly especially at the very front.
I left the heater keep running and eventually the haze was gone. A check of the temp at the V birth showed it had come up to match the main salon.
My current working theory is the still damp, but warmer air hit the cold air at the front of the boat and bingo I had clouds!
My CO sniffer arrived today and I am of course going to use it to check the exhaust for leaks. This is especially important on the boat as the entire exhaust run is INSIDE the boat. CO alarm arrives next week. It seems Marine CO alarms actually work differently from home or camper units, so one has to pay the extra for the "marine tag".
Now I have to sort out how to find some insulated 3 inch heat duct. I measured the temp on the outside of the metal flexible duct and found it to be nearly 100C. It did cool down a bit once the heater hit temp and was no longer running full blast, but still I do not want anything that hot in contact with my fiberglass, wood, or crew!
I suppose I could lag it with felt lagging, but that will take a good bit of felt and a fair bit of time. That is however my fall back position if I find no other solution.