A clang is not the same as a clunk. On one mower I once owned I found out the starter cup had come loose and was hitting against the mesh guard which was hitting against the winder. This in turn had loosened the bottom of the winder. I was sure it must have been something internal until I took the cowl off and realized the problem. That created a definite clanging sound. However, in your case, the smoke you mention is a fairly sure bet that your problem is internal, as others have already said.
