VehiGAZ,
I've noticed that smell too, but only in winter, and I'm wondering if it is the smell of the mag-chloride (or other stuff in the snow that gets kicked up) that they use to de-ice the roads out here in my little corner of Colorado as it burns off of the exhaust. I've done some off-roading before with the TOD engaging and disengaging, but I never noticed that smell. Only on snow.
My TOD might be frying itself too, but that's my two cents.
"The major difference between a thing that might go wrong and a thing that cannot possibly go wrong is that when a thing that cannot possibly go wrong goes wrong, it usually turns out to be impossible to get at or repair."
-Douglas Adams, Mostly Harmless