Hi. This is called an umbilical granuloma. IT has the classical characters of stincking smell and discharge as you explained. Since it has got a stinking discharge this can be an umbilical sinus or a fistula, wherein there is connection between the umbilicus and wither the urachus meaning the urinary bladder or the intestines with Meckel s Diverticulitis. I would suggest you first to get a clinical examination done by a Surgeon and CT scan of the abdomen to confirm the diagnosis with associated problems as discussed. You will an exploratory surgery and to deal with the findings.