1984 Oldsmobile Cutlass hole in piston

1984 Oldsmobile Cutlass Supreme mileage: rebuilt. I re-gasketed a previously owned engine and put it in my car. I was traveling roughly at 65-70 mph when the car lacked all power and gave the car behind me a blue smoke bath. I pulled over at that time and checked the #4 spark plug and it was coated with oil. At that moment I thought my valve seals were shot. I towed the car home, opened the subject up, and found that along with valve seals the #1 exhaust valve had a pie slice hole in it. In addition, the #4 piston had a hole in the top of it. I am not a certified mechanic but I think though I may be wrong that the spark plugs that I was using were at the wrong heat range. I was using AC Delco's rapid-fire. If you would tell me why there was a hole in the piston and why there was a hole in the valve, I would be very grateful to your service.