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Brake pad taper. Check this thread http://forums.corvetteforum.com/show....php?t=1686727 post number 14. Been there and done that before. If you bleed the brake fluid you will not see any improvement. In a few weeks of street driving the pedal should start to come up some as the taper tends to reduce under those conditions. If you want to get rid of it right away throw in a new set of brake pads. Any make or compound of pad will do the same thing so don't look for other pads to solve the problem.
Pad taper will definitely give that soft pedal feeling. The smell is most likely from overheating the resin bonded pads which often draws the resin to the surface and glazes the friction surface. Smells a bit like a burnt plastic and manure combo. As Bill said, it will settle down after a while.
If you're handy on the tools I would bleed a little fluid out of the calipers as this may have carburised from some hard driving.
I would still check on the brake fluid. If it has more than 30k miles on it chances are it isn't performing as good as it should. My brakes felt a bit soft, and after changing the fluid to synthetic, brakes feel much better. HAWK pads are pretty good as well. Ceramics don't perform as well as semi-metallic pads either. Just keep those things in mind.