If you can smell it burning I would not suspect the LIM gaskets, though I cant necessarily conclusively rule it out. However, if you can smell it, that means the oil is leaking onto something hot and the only common issue that would experience that would be valve cover gaskets.
Ive only heard of a couple of people with broken or leaky oil sending units and even then it wasnt to where it was burning, it would just leave puddles of oil under the car.
While as Sabre mentioned, the LIM gaskets are common (at least the plastic ones, the newer aluminum ones I have not heard of any issues with them) for leaking, they generally leak coolant into the motor.
Im going to assume for the moment because you said you are a diesel nut that you either have some experience turning wrenches or not afraid to. Correct me if I am wrong.
But working from that assumption there are two ways to proceed, if I hold to my asessment that it is the valve cover gaskets.
1. Just replace the valve cover gaskets and fix the immediate issue, which will cost about $40 for the gasket set. BE ABSOLUTELY CERTAIN you get the valve cover gaskets for the supercharged L67 engine because they are different from the non-supercharged L36/L26 engines. Shouldnt take more than a couple hours to do. You do have to loosen or take off the alternator, I dont recall which, for the rear valve cover and the ICM bracket to get the front valve cover off.
Which leads me to option 2
2. You could get proactive and go ahead and replace the LIM gaskets, provided they havent been replace before and have the newer aluminum gaskets (I suspect not) which will cost about $50. And since you still have to take off the ICM bracket to do the work and therefore might as well take off the alternator too, which then frees up the room to go ahead and do the valve cover gaskets as well. So you could knock out where I suspect the leak may be anyway and take care of where a leak (much more dangerous leak at that) is bound to happen down the road. I cant say, honestly that I know of anyone that has not reached the point of needing to replace the LIM gaskets in a Grand Prix at least.
So those are my thoughts on that.
There is a video how to in the How To section (link at the top) for replacing the LIM gaskets which would be a good one to look at if you decide to take on this work. Honestly, its not hard work, just kinda labor intensive. Oh, and Id get new fuel injector Orings 'cause you would need those as well if you do the LIM.
