Need help with Diagnosis

[hightide]

My wife was driving our 98 ML320 when she hears a "thumping" noise coming from the engine. Then... the battery light starts going on and off while she's driving, the power steering starts to fail, and the engine wants to stall at a full stop.
Today...
I started the truck cold and it fired right up, and ran fine, the power steering responed well, no battery light. But alas the thumping noise was still there. As the engine rpm's increased the rate of the "thumping" increased. I looked in the engine compartment and the v-belt was fine. But I did smell a burning odor. The "thumping" sounded like it was coming from the water pump. Could that be the problem?
Anyone care to speculate? Thanks!