It sounds to me like your power supply is going into current limit. Answers to the following questions will help me to better understand the problem.
What is your power supply?
Does it output the correct voltage (12V?) before you connect it to the induction heater?
Does it deliver 10 Amps at (12?) Volts when connected to some other load that will draw that much current?
As for the unit smoking at 2-3 volts. That is about the turn on threshold for many mosfets, so they are just barely turned on. When mosfets are barely turned on, they don't handle power very well.