Smoldering anything, lump, briquettes, wood etc give off a bad smell, you never want the smoke from anything that is smoldering in contact with your food. 

In a WSM do not use wet, soaked, drenched, damp, H2O anything wood. 

I am going to give you my exact method for using lump in a WSM, you will get 5-6 hour burns, at minimum, with no fuss, no muss and no 'bad smell'. 
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KISS Method for WSM

Fill WSM ring 1/3 full of lump charcoal, put two 2x2 up to 4x4 chunks of dry barkless wood on top of lump charcoal. 
Add an additional 1/3 of lump, add two more 2x2 up to 4x4 chunks of dry barkless wood on top of lump charcoal. 
Fill WSM ring almost to top with lump charcoal. 

Start a chimney starter full of lump with crumpled newspaper, let the lump become fully engaged. 

Dump the burning lump on the coals in the WSM

While the lump in the WSM is catching from the burning chimney starter lump put the WSM grates directly on the fire to burn off any 'residue' from you last cook. When you have burned and brushed off the grates, put the waterpan on the fire, half at a time, and let that burn clean as well. 

Your fire should be ready to go by the time the water pan and grates are clean. 

Assemble WSM barrel and grates, fill waterpan (I use a charcoal pan from a Brinkman watersmoker, which holds 2-gallons, as a WSM waterpan) 

Just before putting the assembled WSM barrel on toss two 2x2 chunks of dry barkless wood on burning lump charcoal. 

Place meat on smoker grates, place assembled WSM barrel on bottom of WSM, put on lid. 

Leave alone, don't touch, don't open until you think meat is 3/4th of the way done, at least. Then take a peek to see if it is cooking on the fast side. 

Vent positions are dependent on ambient temp, type of meat and how soon you wish to eat. 

That's all there is too it. 

Keep it simple. 

Regards

Smoking in Chicago,
Gary
