Cecilia, I've got the same problem: not the smell, but the pop pop/steaming/cooling off sound. It happened once with my Singer pedal (metal one, not bakelite). I looked inside and found nothing. It didn't happened again so I was feeling safe to keep operating it. Then I got the same sound coming from my "new" Bernina 730. It is operated with a knee controller, not a foot pedal. I was able to put off the cover of the motor and look at it while running. It was coming from the controller, not the motor. I noticed that there was sometimes a tiny spark coming from the two metal pieces pushed by the bolt actionned by the pressing of the pedal/knee controller. The pop pop sound happened after I saw this tiny spark. After leaving the machine unplugged for a while I cleaned the metal pieces in case the spark was caused by some dirt, but no success. I posted a question about it on BerninaThirtySomething group, and I'm waiting to see if anybody have something to say.
So... I hope somebody will have a clue about this controller problem, because it will help me too!