My B50 I got a month ago had the same problem, and quite severely. The smell reminded me of when you leave CDs trapped in a small space under the sun for hours, like rancid plastic and metal. You could smell it very clearly off the outside of the machine and in the water.
I would say to run 20-30 cups of water through it, over a period of a few days. Also, the smell seemed to dissipate a little just by sitting out of the box for a week or two.
No one can understand the truth until he drinks of coffee's frothy goodness. - Sheik Abd-al-Kadir
Keurig B50 #2 ($22.50, first R.I.P. 1/07)
Senseo (black, FREE)
current faves: k-cup - Timothy's German Chocolate Cake, pod - Timothy's Italian Blend