I'm having a similar problem. I bought some yarn off ebay, and one of the set stinks. I don't know what the smell is, but it's ucka!
I want to use this yarn to make gifts for my mother, so I don't want it to be stinky. It's wool yarn.
My concern is that if I wash it and dry it, it will felt. I've never felted before, and I'm not exactly sure what the process entails, but I don't want my skeins to felt together.
So...any suggestions? This isn't going to be stored away for a long time or anything. I just need to do something to get the stink out. I can't even stand working with it how it is.