2000 Chevy S-10 Blowing smoke from exhaust and burning smel

I just purchased a used Chevy S-10 Xtreme. On the way home from yhe dealer I noticed it was blowing out smoke from the exhaust smelled also. The Check Gauges light came on then went off. My neighbor came over to look at it, he could smell the odor. He said the gauge for the Oil was not reading correct and that it could need a new Oil gauge. What does it sound like the Problem is to you???? Also if it is a MAJOR Problem am I covered under the 30 day Lemon Law...Thanks ~