ipd, the short answer is yes. You can rebuild the 3.5L to eliminate the oil issues.
The dominant theory is that the oil drain back holes that are in the pistons of the original 3.5's are both too small and too few so they get clogged up and don't allow the oil to drain back down into the engine so the oil gets burned during combustion instead. You can take your engine apart (or have it taken apart) and drill bigger/ more drain back holes to allow the oil to drain back into the engine. I think you can get a new piston set for the 3.5 with the larger holes already drilled in them too. The larger holes should take care of the oil burning issue.
Some of the newer Isuzu 3.5 engines had the larger drain back holes already in them so they don't experience the oil burning issue. I actually had to replace my engine, as my original one burned a couple of valves, and I ended up buying a new Isuzu crate motor that had the updated pistons already installed in it. Before the engine swap, my old engine was burning up to 3/4 of a quart of oil every 350 miles (every fuel fill up) which it did from the day I bought it with 35,000 miles on it. After the swap, the new engine has not burned a drop of oil in over 40,000 miles.
Here is a thread that I started about drilling the oil drain holes with information that I got from Jerry Lemond:
http://www.vehicross.info/showthread...il+drain+holes
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