Ok, good, more answers. I'm still leaning toward bad or wet lump that wasn't burning properly, as you put in KBB and the problem fixed itself. And just leaving the charcoal bag open in moist or muggy conditions can be enough to take on moisture. Use KBB for a while, I bet your drum runs fine.
When you start your drum, how do you do it? How many coals, how long does it take to get up to temp, and do you slowly raise it to a temp, or kinda fly past what you're after and fight it back down? The answers to this will say something about your combustion. I don't think bitter had anything to do with the charcoal. I think you probably put your food on too soon is all. When I start my drum, I'll fire up 15 coals or so. When they're ashy, I throw them on top and close it up. I know roughly where my settings should be, so I set them and leave them. Then I wait about an hour and a half. It takes about that long to get the drum up to temp and into the grove. Until it settles in, it isn't puffing thin blue, so I don't wanna cook with it. You'll see. I think you said you waited 10 minutes? That means that an hour or more of cook was in smoke filled with creosote. The first hour is pretty crucial in smoking, as your meat is taking on most of its smoke at that time.
One more thing... Looking at your picture a little closer, Your exhaust may not be enough. Open that third exhaust port up. If you cut 1" holes then your pipe is 3/4"? That give you less than 1 1/2" worth of exhaust by the time you look at the ID of the pipe. I would keep all 3 wide open the whole time you have it running. Too much exhaust is better than not enough.
