The problem isn't the sleep. The combination of Azelf setting up screens and exploding before going to Whimsicott to Taunt any opposing taunters with like the fastest taunt in the game, whilst being able to get up Tailwind before Mementoing to Smeargle, which with screens and the opponent at half offences it makes Smeargle's bulk look good. 55/35/35 bulk looking good! Following this, Tailwind allows Smeargle to Taunt any opposing taunter unless it is fucking Prankster, or/and then procedes to boost one of its defensive stats to crazy levels in a turn, and then the other one in the next turn, essentially passing +3 Def and +2 SpAtk, SpDef and Speed to any participant, most likely Espeon because that is the point where you have either Perish Song, Haze, land a lucky crit or get absolutely fucked. You like legit need to BP or hard switch to your Sableye or your own Prankster Taunter on the turn that the Whimsi Mementos or you have little chance of stopping it.
My main problem with this strategy lies on Geomancy, because the ability to double 3 stats in one turn is utterly ridiculous. Yeah you can run Quiver Dance to replace Geomancy, but at +1 Speed you are still outsped by quite a few strong scarfers that want to pummel you, at +1 SpDef you are still not that hard to break on the special side and at +1 SpAtk you aren't hitting quite hard enough for most receivers to effectively sweep. That leeway gives the opponent a chance to switch something in on the turn that it goes for Quiver Dance 1 and effectively stop it then and there. At +2 after one turn it is too bloody hard in most cases. This is why I think that Geomancy should be banned. Banning a single move isn't really a complex ban, and it only effects one Pokemon.
Though of course other options may prove to be broken too, but honestly, Geomancy seems to be the most overpowering feature of Smeargle and I feel should get the hell out of here. If other moves prove to be broken (though I doubt as broken) then they can be removed later.