I've used camp DOs, but never in this application...I've smoked on open grates, then added to the DO for a complete meal, sure...never smoked IN the DO. A couple problems/hurdles I foresee: the pellets will need about 400* just to start smoldering to produce any smoke...likely higher to get any appreciable amount of smoke. If the pellets are on bottom in direct contact with the cast iron you would need an extra 2-3 briquettes more than the 10 required for bottom heat of a 350* oven temp @ 70* ambient with no wind (using the -2/+3 firing method). If you fully covered the DO bottom with pellets you will get a ton of smoke up front once it's hot enough to smoke, then over, done with, and gone, because all of the pellets will begin smoking at the same time. A 400*+ DO will turn into a very hot and fast smoke. The smoke wood will also need some air to continue to produce smoke, or they will simply char after a short time due to exposure to heat in a zero-oxygen environment. You'll need a slightly shimmed lid (loose fitting) to allow venting of the smoke so it does not become stagnant, which produces a bitter, acrid flavor on the food...also, you have no inlet air from the sides or bottom to aid in draft for exhausting the smoke.
I have never tried this, or considered it, and I think after examining what would be necessary to pull it off, including possible permanent mods to your DO (drilling holes), one would have to ask if it would be worth it. The high-temp smoke would be suitable for a few meat items such as thick cut chops or steaks, burgers, fresh sausages, chicken pieces, etc...can't think of anything else I would try it with, though more could be added to the list of potential candidates. Here's what you need to consider about hot & fast smoking: the higher the temp with hot-smoking the less time the meat will be exposed to smoke before reaching finished temp, equating to less smoke flavor than if a low & slow smoke method were used (225-250*). That said, a hot & fast smoking method incorporated with a fast onset of heavy smoke may be just the ticket...get the smoke rolling, then drop the meat in and let it rip for as long as it lasts, or, until you reach finished temps...whichever comes first.
Food for thought...shout back if I missed anything or failed to explain my line of thinking well enough...this is a new one on me, so I'm shooting from the hip here.