Hello, I hope the following is of assistance.
The air conditioning compressor is located on the driver's side of the car at the front, as you mention a burning smell and smoke from this area I would check the drive belt for the compressor, also check that the compressor pulley rotates freely and that you can turn the drive plate as if either of these seize this will cause the belt to slip.
The water pump on this engine is driven via a different belt so the engine cooling isn't affected with any fault on the air conditioning compressor belt system.
To remove the compressor drive belt is very awkward as there is a special tool to move the belt tensioner, you may have to fabricate a tool yourself or try to access the tensioner with a very slim half inch drive bar/ratchet.
An example of the special tool is at http://www.ebay.co.uk/itm/FORD-DIESEL-ENGINE-TDDi-TDCi-CHAIN-DRIVEN-AUXILIARY-AUX-BELT-TOOL-/360458615145?pt=UK_Hand_Tools_Equipment&hash=item53ed01f969
Check all the other pulleys and components driven by this belt as if any have failed they can damage the belt.
Start with the points above, let me know if I can assist further or if you have more questions regarding this and I'll reply as soon as I'm able to.