I have a 1998 Outback Sport (Impreza) that has just started blowing out a burning odor when the a/c compressor is turned on. No smell with just the fan and no unusual smells from within the engine compartment. Any ideas ? The car has very few miles for its age, about 60k.

the smell is coming from the inside of the vehicle? are you using the fresh air or recirculated (max ac). if you are using fresh air, its possible the clutch is slipping and the smell is traveling into the fresh air intake. of course you should be able to smell that under the hood, but maybe it has to be running at a fast enough rpm to slip and make the smell? it seems strange that its linked to the ac compressor itself, does the burnt smell, smell electrical or does it smell like a burnt clutch (smells like burning hair to me) 

Does it do it with the blower motor on and the system on vent or heat?

 

Can be a bad AC belt, a torn axle boot, oil leak bad compressor

There is no smell with just the blower motor. That was my first thought but nada with fan only at any speed. Its much worse with system set to recirculate but an odor drawing fresh air too. It smells more like a burning clutch than electrical.