In the battle script for Smithy (first form), the script it's located in is script 82. It took a little digging to find the part where he lights up like "Test", but I found it.
At $3AE793, delete the part where it says "Jump to address $3AE766". That's a loop to check to when he's ready to transform; it jumps when the AMEM $60 bit 0 is clear, or when he's not ready to transform. When bit 0 @ AMEM $60 is set, that means he's ready to transform. It'll stop the check and jump to the part where he transforms.
Deleting that Jump command will let you see/edit the part where he transforms. Make sure to add that jump back in there, otherwise the game won't keep rerunning the check, and it'll cause the transformation process early!
This image tells you exactly where it is: