7000 miles is alot, but I have seen them go over 10,000. Just depends on how hard the bike has been pushed. sounds like a top end rebuild to me. If the smoke doesn't bother you, run it alittle longer.
You are looking at about $250 in parts to rebuild the top end. This includes a piston kit (you choice, factory or aftermarket) top end gasket kit and a bore job. This price does not include labor.