My kitchenaid standmixer started to smoke, need to open

Open the gearbox up and look inside, the damage will be obvious once you clean the grease away. You aren't going to fix it from the outside so opening it is going to be part of the solution.

Why would you raise the beater if you want it to reach the bottom of the bowl? You need to lower the beater. Turn the screw in until it just touches with empty bowl on high speed then turn it counter clockwise a 1/4 turn so it will just clear.

When you say that the "motor's continue to go out," do you mean that the motor itself stops working or that the motor still runs but the beater stops turning? These are two different problems.

Take a look at this Service Manual which is correct for your model and see if it helps:

http://www.kitchenaidparts.eu/documents/pdf/service-manual/classic-svc-manual-new-email-version.pdf

Where exactly is the oil leak coming from? Comment back to this post.

burnt motor ,not safe do not use

either the electrical motor brushes are worn down on the motors commutator and can no longer contact the motors commutator bands,or if its a newer style mixer the triac that controls the speeds on the unit could have opened up and can no longer supply variable or even high speeds

The mixer normally has it's gearbox packed with (quite thick) grease. Over time it can heat up and become more fluid and leak out. I would guess that the amount of oil you saw would not be a problem to loose. If it were mine, I would use it and not worry. If you do feel you need to check, the grease is packed in the front of the head. You will need to remove the head, split it (you will need to remove the band and planetary) and then you can see the gears.

just open it up and lubricate the motor

there is a kit on ebay for both 701 and 901 kenwoods requires use of soldering iron do a search for Kenwood motor repair it is unlikely to be the motor usually the speed contoller components

make sure you are using the right attachment. usually for batters you want to use the flat beater. not the dough hook. the flat beater looks like a triangle with lines through the center. and make sure you are using the correct speed on the mixer. start out at stir and then go up to no more than half speed. these mixers take a little longer to incorperate batters but they do a very good job at it. if the batter is thin enough you can try using the wisk as well. but only if it is a thin batter.