98 Taurus lost oil

This is a weird one. I changed the oil on my 98 Taurus with 92k miles, has the standard V6. We took a trip to Myrtle beach, SC. (around 2000 miles), came back, oil level OK. Took another trip to Mt.Vernon Ill, around 200 miles, oil still OK. The wife drove the car around town approx 100 miles or so and Wed. evening she comes home with a serious knocking noise. Sounded like it was coming from the rear of the engine, possible the bank of cylinders closest to the firewall. She took the car to Midas (yes, I know, but they were the only ones who could look at it on short notice). They discover the car is virtually out of oil and white smoke is coming out of the tailpipe. They initially claim that the engine blew but after refilling the car with oil, it runs PERFECTLY! What is going on here? She drove it to work this morning and we'll be monitoring the oil usage continuously. This car has never had an oil usage problem and the changes have been every 3k - 5k miles.

Any idea's??

Just bought a 98 that supposedly needed an engine because it was out of oil.....engine seized up. Problem was actually diagnosed by a local Ford dealer!!! "Yup, You need a new engine!" they told my friend. So they bought a new car and sold me this one thinking that I now had to find a good motor. I trailered the car home and charged the battery and then I had to try it. I turned the key!. It cranked right over so I checked the oil. Down 4 quarts. Added oil and after a few cranks...it started right up! Surprised as hell!! It went through a serious strange noises and rattles that at first sounded like lifters, then changed to clattering, then a tinny rattle/buzzing and then it all went away! So I took it for a spin around the block and the only thing I noticed is the oil light flickering at de-cel or at idle speed. Now this is weird!!!
I bought the car from a friend for $1.00, seriously ONE DOLLAR! I had no idea all it needed was oil. I'm waiting for the darn thing to explode on me somewhere. Ain't that strange!!!! Now I don't know what to do???? My conscience is bothering me. Should I Return the car????? ....and what ever happened to all the oil in the first place....and how can a seized engine roll back the stone, rise up and run????

Here's the other thing, the evening before she took it to Midas I checked the oil and it appeared to have enough. A friend followed her up to Midas and he saw no smoke coming from the tailpipe. I just restarted her car and you can hear a slight knocking, again, almost sounds like it's coming from the cylinder bank against the firewall. I'm to the point that I don't believe this story from Midas but there is definitely something wrong. Could this be a head gasket or an exhaust manifold gasket problem?? I put the old screwdriver up against the valve covers and listed and couldn't hear the knock internally. Weird.

So far, no loss of oil since she got it back from Midas.