Why are the Boeing 737 nacelles odd shaped?
The engine in question is a CFM56 turbofan engine which is larger than the JT8D the plane was originally designed for and thus has less ground clearance. This meant that they needed to flatten the bottom by moving the accessory gearbox to the side from the bottom and shrinking the fan.

To quote Wikipedia:


  In the early 1980s Boeing selected the CFM56-3 to exclusively power
  the latest Boeing 737 variant, the 737-300. The 737 wings were closer
  to the ground than previous applications for the CFM56, necessitating
  several modifications to the engine. The fan diameter was reduced,
  which reduced the bypass ratio, and the engine accessory gearbox was
  moved from the bottom of the engine (the 6 o'clock position) to the 9
  o'clock position, giving the engine nacelle its distinctive
  flat-bottomed shape. The overall thrust was also reduced, from 24,000
  to 20,000 lbf (107 to 89 kN), mostly due to the reduction in bypass
  ratio.


They also mounted the engine in front of the wing rather than below to get every bit of clearance they could.