I have a 92 SC3 with 195K miles. Three days ago, I noticed a burning smell (like rubber or plastic. Something synthetic.) Two days ago it became worse and I was able to see where the burning smell (With actual smoke) was coming from. A gray smoke was coming from the catalytic converter.
Since then, it hasn't done that (to that severity) but I still smell a hint of it every once in a while.
Is this just a bad cat or is there a deeper problem here?

 

maybe just a plastic bag got caught on it and is slowly burning off... i see that quite often.

 

upon closer inspection, I noticed a couple drops of oil coming from the cat. I'm guesing it's coming from the exhaust manifold via some bad gaskets or something.
does that sound like a possibility?

 

It can happen. I had a gasket (OEM) go bad a few months after the replacement of my messed up cat. Not sure how the oil getting through to that area.

Sometimes a bad gasket by the cat will sound like something is loose or squeaky when going over a bump and you mistake it for a suspension issue. Most of the time, it will sound like something is rattling in the cat.

 

Two days back, the service engine light came on after the oil burning on the cat. I'm taking it to my mech. in the morning. Wish me luck...

 

The leak ended up being a bad seal on the tranny. Got it fixed for less than $50. Dodged a bullet on that one