problems with preheating dutch oven

First, wipe off every speck of butter or oil, rinse good in hot water and wipe down clean and dry before you start your pre-heating. The dough won't stick to hot metal, so you don't need to lubricate the dutch oven.  I like the idea of starting the warmup on the stovetop, but once it gets moderately hot it could go in the oven for final heating. It is important for the oven and dutch oven to both be thoroughly hot, which means not just the air inside the oven, but the oven walls and dutch oven as well. So it's best to hold the oven with the dutch oven in it at baking temperature for 15 minutes or so before you put in the bread.

All horribly inefficient, except in winter when the process warms up the kitchen and adjoining rooms nicely.

Once baking is done, then re-oil the dutch oven so it doesn't rust.

I agree dough does not stick or it may stick a little then release. I do not normally wash my seasoned cast iron before baling in it. I would just wipe it out with a paper towel. Any washing would be done right after use if it is something that will stick.

There's no need to grease the DO before baking. That will eliminate the smoke. And yes, wet dough will sizzle when it comes in contact with hot cast iron, that's quite normal. What is the reason for pre-heating the pots on the stove rather than in the oven? I think maybe the bottom of the pot is getting too hot, while the rest of it (including the lid) is not hot enough. You need your DO to be a little oven for sure, with heat all around.

Why not pre-heat the dutch oven in your oven as it pre-heats? That seems more efficient than heating up an empty oven  and turning on a burner.

 to always preheat in the oven, with the lid (off) so the DO heats evenly on all sides and so you get consistent baking results. It doesn’t matter how efficient it might be, if you get unevenly backed bread, and the oven still needs to reach its preheat temperature anyway. The oil burns on the stovetop because the bottom of the DO can reach 450 degrees rather quickly (I measured it) but the sides take a long time to heat up, and are constantly losing heat, cooling the DO, so its not 100% efficient. 

Butter has a very low smoke point (it burns at 300 degrees F according to “The New Professional Chef”, 6th edition * 1996, by The Culinary Institute of America, published by John Wiley & Sons) so butter is not ideal at baking temperatures for coating the DO (where it reaches super high temperatures). 

I think that its better to place the DO in the oven as it preheats so it ensures that the DO is at maximum efficiency, because its completely surrounded on all sides by even heat. It seems to me that doing it on the oven is therefore more efficient.

If the butter is smoking, its burning, which is not healthy for you. I never oil my DO, it screams anyway when I drop the dough in because the water is instantly vaporized on contact (I kind like that sound). 

If the DO is preheated properly before the dough is placed inside, then the dough will not stick. Not using any oil at all is more efficient than wasting oil where its not needed.

I simply preheat my DO (uncovered) and its lid in the oven as it preheats, then use a contactless IR thermometer (very inexpensive on Amazon and pays for itself in reducing preheat times to the minimum, this is the exact one I have: http://amzn.to/214oTaw ) to know exactly when to throw my dough in there. Since the DO is fully up to temp all the way around, the dough bakes perfectly evenly all the way around and does not stick, it just falls out every time and has a beautiful brown crust.

If your DO is not enameled cast iron, you probably shouldn't wash it with soap without then re-conditioning it. To recondition you have to coat it in lard (not butter or oil) and "cook" it in a hot oven anyway. Pre-heating it without the lid would probably have cooked off the last of the smoke smell and been better for the pot!