W140 Funky smell - Transmission?

I have a 1994 S500L (W140) I often notice that after I force the transmission to do a red-line shift there is a funky smell, most noticeable outside the vehicle. Does anyone know if this smell is hinting at something going wrong. The engine temperature is always normal, My only concern is there could be a problem with the transmission, I don't know what burning transmission fluid smells like but I would describe my smell as something "funky" not like hot plastic or oil. Also what is the correct procedure for checking the trans fluid level, I have heard something about the car has to be either hot or cold and in a certain gear when the level is checked. Any ideas are appreciated even if it is just reassurance that "funky" smells are normal operation.