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Does that picture show the coolant spraying into the center of the V? If it is, then it's coming from a crack right at the head bolt location. I've seen blocks cracked there before. When they rebuilt, did they use head bolts or head studs? If it's studs, then they seated them too deep and cracked the block. If it's head bolts, it doesn't necessarily mean they screwed up.
Cracks in S65 block can be very hard to see. I've seen blocks that look visually perfect, but when you start them up, coolant leaks out. That's how hard it can be to see a crack in the S65 block.
From what you said, it was already consuming coolant before the rebuild. That is usually caused by cracked block, or blown head gasket. You said it smoked out the exhaust. That can be head gasket, rings, valve stem seals, or cracked block (if the crack is internal).
Unfortunately, without a full tear-down, I don't think there's enough info to know what caused this. That also means there's not enough information to blame the builder because some of the same symptoms exist after the rebuild as they did before (consuming coolant).
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