Aside from the smoking issue you might also consider your recirc valve - mine went bad almost right away after the first few days I owned the car. The symptom was, in either position the car fogged up real bad. It would only defog after a while of having the ac on high w/ heat. Turns out the actuator was dead in the closed position. The other thing I just thought of, is, there was a chunk of insulation that lives right by the actuator and maybe it has started interfering.