The issue was the the Data > Submarine > USA_Iowa.sim
3-bj_Funnel
4-bj_Funnel
both funnels had the wrong Parent I.D numbers. So the .sim had no links to the main ship model, and did not know where to put the smoke.
So I had to go to the Data > Submarine > USA_Iowa.dat to retreive the correct ID's from each Funnel [Cos1 & Cos2 ]
You may need to find a darker smoke effect tho. This was done in SH4 - Stock.. Hope this helps.
Download
here from google-drive with smoke working.