Burning Rubber Smell From Drill Press Belts
A burning rubber smell comes from friction between the belt and something else. A well adjusted belt should not smell on break in.

Possibilities:


Belt rubbing on a pulley that's out of alignment (probably not since it's been checked)
Belt rubbing on rubber left behind from the previous belt (clean the pulleys)
Belt slipping (check and adjust tension if needed. As JPhi1618 said - check to make sure spindles are turning freely.)
Belt rubbing on something in the path of the belt (check for a clear belt path)


Be careful, things can break and fires can start when there is unwanted friction.