The bottom-line is that if your wood burns up in 30 minutes, you aren't going to get very much smoke production. I don't care if you put in 10 ounces of wood, if it burns up in 30 minutes you aren't going to like the results.
Try to find the hot/warm/cold spots and then place your wood chunks accordingly and this will help prevent the combustion. Your goal should be to find wood chunks that are solid, black, and much lighter than they were when you put them in. This could take a little experimentation to perfect the location/s.
Use good (non-big box) wood and either foil or ramp-up or a combination of the two and you'll find that your wood will smolder for a good 2-4 hours or so and by that time your meat will most likely hit the magic 140-degree mark where meat doesn't take in any more smoke and you are good. There are times where you may not see a lot of smoke coming out of the smoke hole, but there is still a lot of smoke in the box yet.
I have done hundreds of smokes in my #3 and I always get plenty of smoke. If anything sometimes I get a little too much. And I like it smokier than most.
I agree that the controller is not the problem. It was obviously hot enough to burn your wood to ashes. I still contend that the problem was that with the big element in the #3 hitting the wood at full blast until the box temp got up to your smoking temp was just too much 100% element at one time. This is why I prefer the ramp-up method. Just at the point where the wood is ready to combust, the element turns off and gives the wood a break before hitting it again.
We're just trying to help. So, take the advice for what it is worth I guess. Our goal is to help everyone get the most out of their Smokin-It smoker. Sometimes it takes a little trial and error, but don't give up. We'll get you there.