Get those injectors checked out. If it is going out the exhaust, the injectors are most likely where the fuel is entering the engine. And I'm sure you're not going to like this, but my experience with the 354 Perkins has been that when they start wet stacking like you are talking about, it's time for an overhaul. Check the injectors first, it might be just them.

As to the oil capacity, I don't recall. Maybe someone else can fill in that blank.