Moscatel Nachshon stormed to the top of the leaderboard at Royal Queensland with a run of five birdies from the 12th to the 16th hole, carding a bogey-free round of eight-under to be one shot ahead of local talent Min Woo Lee.
Home favourite and former world number one Adam Scott was two shots further back at the A$2 million ($1.3 million) event, which kicks off the new season of the DP World Tour.
Three-times champion Smith has work to do to avoid missing the cut after shooting 73 to be 10 strokes off the pace.
Teeing off just after 6 a.m., the tournament's top drawcard bogeyed his first hole - the 10th - then dropped two shots in his last three holes as his usually elite iron game went missing.
"It was frustrating, upsetting. I really couldn't get anything going," said the mullet-haired 2022 British Open winner.
"There's no reason why you shouldn't have gone low, it was just pretty terrible golf.
"I felt like I was over the ball not knowing what I was going to do, which is a pretty bad place to be on a golf course."
Runner-up by one stroke at the recent Hong Kong Open, Smith is desperate for a good week in hometown Brisbane to shore up his ranking and qualify for the Paris Olympics.
The former world number two has drifted to 18th while unable to earn ranking points on the LIV Golf circuit.
"I don't think anything's out the window yet, it's going to take a lot of good golf but there's no reason I can't have a good weekend and still be competitive," he said.
Chasing his first win in nearly four years, twice champion Scott bounced back from a bogey on the 14th, his fifth hole, with a run of five birdies in six holes either side of the turn in his round of 66.
However, the day belonged to Moscatel Nachshon.
Nachshon was thrilled with his play after recently missing out on a DP World Tour card by a stroke at qualifying school.
"It was a crazy round," he said.
"I didn’t even know it was the course record, we just played our golf and it was so nice to equal that record."
