3.5 quarts in 500 miles???
Have you checked for suction at the PCV valve?
Sometimes the tube going to the carb flange is completely filled with cack.
Maybe your rings are sticking from sitting?
I would run a quart of Rislone or ATF before the next oil change and use high detergent diesel oil from here on out.
My truck hit 430,000 yesterday and that means I have ~150,000 mi on this engine.
Always using cheap diesel oil and a Motorcraft FL1A it was amazingly clean inside when i swapped valve covers a week or two ago.
Do the cheap stuff first, before condemning the engine.
Lil'Red is a '87 F250 HD, 4.10's, 1356 4x4, Zf-5, 3G, PMGR, Saginaw PS, desmogged with a Holley 80508 and Performer intake.
Too much other stuff to mention.