I have never been there when they are releasing water but have camped at Santeetlah several times. If the water they are releasing comes from the bottom of the lake by the dam, then it would be full of decomposing organic matter, hence a bad smell. If the water is coming over the top, it should be clean and fresh smelling. The source(s) for that lake are about as pure as you can get, so my guess is the first scenario above.