It's less than a puddle but the hose is pretty oily and the bottom engine protection (not sure what it is called, a felt-like thing underneath the engine, up front) has collected a palm-sized stain with a 3Xquarter-sized puddle over about a week of daily driving.

Well take a look and see if there's melting or shredding. Also oil leaking from timing chain cover or front of valve cover.

Ok, how bad is it to be driving with a bad belt – not good I guess, but is there a risk of serious damage? Would I hear it scraping or such when idle?

I'm changing the valve cover gasket over the weekend after noticing a leak down on the left side (when facing the front). This involves a 2 hour drive though (nearest garage with a friend with know-how and tools) and I'm worried about driving with something burning underneath the hood.

If its the belt and it breaks you wont be going far. I don't know what the oil would be hitting to cause it to burn unless its leaking towards the back and hitting the exhaust..... Also how does your volt meter look? Guess it could be your alternator....

All the gauges check out fine, basically stable on 14V. Oil pressure at normal rate at idle and driving. There is no burned smell when I pop the hood either, it's only when I sniff close to the radiator or front light.

The engine temp is at 95 degrees (celsius) when driving, guess that is around 200 F.

When I turn off the engine I hear a gurgle from the front, as if something with pressure just got it's pressure dropped, I'm guessing that is the radiator?

I did change the battery ground from the side of engine bay to up front (in the pic, I grounded it to the left bolt seen to the down left) because of the wire being to short to reach over to the engine bay side wall. I hope that is ground...

https://www.cherokeeforum.com/attach...engine-bay.jpg

Maybe the bearings in the ac compressor are starting to seize up and the friction isn't great enough right now to create a lot of smoke?

Is the ac compressor engaged even if I don't use the AC? The AC is of little use to me (living in cold Scandinavia) so maybe I should just find a way to freewheel it? (Parts here are as much as gold so I'm hesitant to but a new one).

Ac compressor should not be engaged unless ac or defrost is on unless the clutch is stuck.

If the clutch is stuck, could I then just take it out and have the belt run freely on the wheel? (And just let the compressor and all sit there)

Might be able to pry it closed. You can't just take it out but you could probably take it apart. Believe you can buy just the clutch.

Ok, might do that if all else fails or it will be on the list of things to find at the great junkyard hunt.

I started it up today for a sound check, but the belt doesn't make a bad noise – but if something was siezing up – would I be able to hear it (bearings, clutch etc.)?

Most likely. Did you look at the ac clutch?

Ok.

Didn't really know what I was looking for (except smoke) when I started it today – is there a way of checking the clutch w/o taking off the belt?

Ya look in the middle of the pulley. If its spinning with your ac and defrost off its stuck.

Ah, ok, I'll definietly check that tomorrow along with the leak-check and also if there is a short. Thanks for all the help, I'll report back here for an update – maybe it can help someone else out.