Why don't you try pulling over to the side of the road and watching the exhaust closely after you notice the puff of smoke. This way you'll know if the smoking is constant or truly only when you shift from second to third.

Then again if you see smoke shifting second to third, I can't think of any reason why the same wouldn't happen going from first to second. The same thing is happening engine-wise - a sharp decrease in rpms. I'm sure Hotrod Lincoln can give a good diagnosis on this one.

-ftyler