When wires burn off their insulation it makes a very pungent and nasty smell.
I doubt that your disco will burn down lol, but it will very likely turn into an expensive problem if 12v leads short to resistorized data wires.
Pop the hood and shine a spotlight down the firewall, and maybe around the tranny tunnel from underneath. If you don’t see a gaping hole, or smell the smell, let’s consider it electrical.
Pop off all of your easily accessible dash/console panels and shine an IR thermometer at the various cable looms in your hot zone for a clue.
2003 Disco 2 SE7 - going to be buried in it
2006 RR Sport HSE - project
1997 Disco SE - SOLD
2003 Disco 2 SE7 - SOLD
1995 Disco SE - SOLD
2001 Disco 2 SE - SOLD
Foxwell NT510, Nanocom EVO