Regarding the "shrillness": I don't feel that my K550:s are very shrill. When I purchased them, I was comparing them to the (in?)famous ATH-M50, and I found them to be more shrill than the K550. And, nevertheless, it seems that plenty of people are enjoying the M50:s. I have been disturbed by sibliance exactly once since my purchase, and I have only found a few recordings that came across as annoyingly bright. The highs are otherwise mostly spot on for me. They are far from laid-back, though. I did notice that the highs seemed more fatiguing when listening straight out of my Galaxy S mobile phone than when using my O2/ODAC, so the mentioned "shrillness" might be amp/dac dependent. I greatly prefer using them with the O2/ODAC.
When listening to various AKG phones in a store at another time, I found that the highs/mids of the K550 were pretty similar to the K702 or Q702. They are all very detailed and bright phones. The K550 has a bit more body and a clearly improved bass, but can also come across as sounding a bit congested at times. Probably due to being closed back. I'd be very interested in trying the K702 Annies or the new K712 for comparison.
I must say that I was never bothered by the smell of mine. Maybe when just new out of the box. If mine has the smell, it is not very overpowering. It might be worth removing the pads to wash them with a nice smelling soap if you're deciding to keep them.
Now, the undoing of the K550 is undoubtedly the awkward fit. The phones essentially sound like crap until you get a good seal and position. I found it to be very finicky and annoying until I did the "pad-mod" on the first page and some careful bending of the head band. Now it's mostly OK, but it could do with still more clamping force or anatomically shaped pads.
The blessing of the K550 is the clear, detailed and open sound despite being a closed back phone. Especially at this price point. If you need closed back and like the AKG sound, they're great and worth the hassle with the fit (in my opinion). If you can get away with open back phones, then I'm sure there are better alternatives where you don't have to mess with the awkward fit.