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I also had the same smell and it was coming from the crankcase vent hose which normally runs down below the engine and stops. The fumes were causing the smell. There is a modification described in the Tech Notes which requires extending the vent hose up to the to the air intake for the engine. I drilled a hole in the intake nozzle on the air filter and used a plastic wire tie to secure the end of the hose so any fumes would be sucked into the intake for the engine. This is just before the air filter. It is my understanding that later models have this modification built in to the engine where this line is tapped into the intake manifold and after the air filter. My boat is a 1989 model and this solved the problem for me.
John Warwick
September Morn in Virginia Beach,VA

Guys,
I have a 1989 C34 with the M25XP engine which I purchased in 1999. I was having the same problem of low RPM with clean prop and bottom. Since I did not know the history of service to the engine, I decided to first adjust the valve clearances on the engine before going any further. I picked up about 400 to 500 RPMs and the engine seemed to have a lot more power. It has been going strong ever since. You may want to try this if your engine valve clearances have not been regularly reset. John Warwick