I had the same problem on my wifes car. Then the fan only worked on high. Traced it to the fan resistors and burned wiring. Further digging found a safety SB from Ford. Sorry, can't find that number now. Apparantly this problem can cause a fire. Ford have a kit to change the resitor block in the ducts. I fixed mine by removing all the burned wire which appeared to tbe caused by lousy - read cheap- electrical connectors that could not carry the amps and installing high quality slip on connectors.
Everything now works and no smell.
Suggest you remove the resistor block and have a close look at it. Wana bet you will find a bunch of burned wires?
