On my jobs, I open all the windows and fire off all the heaters together. I spend about 20 min. burning off the shipping residue, that way my customers don't call me late at night wondering what the burning smell is. I've never smelled burning insulation, so I don't know what that would smell like, but my guess is you're firing brand new heaters. So like Glennjanie says, check the instructions before you pull them back out.