Say I have 8 sand as input, and 2 coal as fuel. The 8 sand gets smelted to glass, and then the second piece of coal is consumed when there is nothing to smelt.

The issue is this line here. Change:

if (canSmelt) burnFuel(fuel, wasBurning);

to:

if (canSmelt()) burnFuel(fuel, wasBurning);

and it works. The "canSmelt" situation needs to be reevaluated rather than relying on the cached value.