Bad Waste Veg Oil:
Some of this is relevant, some isn't,

I had a bad batch of WVO from a restaurant once. All indications said it was normal oil.. it reacted normally also but any water used to wash it immediately turned it into an emulsion that was stable for weeks.
I took a few gallons home with me and put it through the rigors of my lab.. tested it every way I could and made a couple dozen test batches. Nothing worked. The stuff would form an immediate emulsion upon washing. I never did figure out what caused it but the entire load of oil became furnace for my waste oil heater.

Ok.. enough of that,
More relevant:
I opened up a waste oil renderer's bin once and it was so bad it almost made me puke on the spot. There was a whitish foam on top with big islands of red and green stuff growing. The smell was unbelievable.
That's bacteria and it will die as soon as you heat the mixture up to 160 degrees and hold it there for a while.
If you can stand the smell, there's no reason I know of why it wouldn't make normal biodiesel. The smell should go away as the heat kills the bacteria.

As for other people, as time goes on and our civilization uses more and more chemicals for everything, people have become more intolerant to certain things.

Some people can sniff methanol all day long and say they experience no side effects.. With others, they end up in the hospital with the slightest hint of smell.

Additionally, many people fake headaches due to unpleasant smells. This provides them an excuse to complain. Its a normal thing I guess.

And just a tip from the Murph:
How many people have stinky well water? You know, that rotten egg smell? There's a way to get rid of that. Add 1 gallon of household bleach to 5 gallons of water. Mix well and pour down your well head. Let sit for 6 to 8 hours. Run all faucets in the house for a full 2 hours. Repeat every 6 months.