Cause
If you smell the highly detectable rotting scent near the unit, your furnace is malfunctioning or you have a propane leak. The Propane Education and Research Council advises that everyone in propane-using households learn to recognize the odor. You should not smell propane around any appliance that uses it as fuel or anywhere else in your house or outside. Any detectable odor is a warning sign of a leak or broken appliance that needs repair to return it to safe operation.
Action
Smelling propane near your furnace requires immediate action, since propane leaks are dangerous. Do not do anything near the furnace that could cause a spark, like strike a match, light a cigarette or flip an electrical switch. These can cause an explosion. Get everyone out of the house, locate the propane tank and turn it off at the main gas supply valve. Call your propane company immediately or contact the fire department if you cannot reach your gas supplier. You may also need a furnace service technician if the problem is your heating unit rather than a leak in a feeder pipe.
Other Signs
Propane leaks in and around your furnace may have other signs in addition to the rotten smell. For example, you might notice a jump in your propane use that you cannot account for in any other way. It's normal to use more fuel in winter, especially when temperatures are particularly cold, but you may have a problem if the jump in your use doesn't correspond to a temperature drop. Inspect your furnace and be alert for smells if your fuel bill goes up without an apparent cause.
Considerations
Furnaces are sometimes located in out-of-the-way places like basements. You might not notice a propane smell near the unit if you don't walk by or check it frequently. You can buy a propane detection unit and place it near the furnace and other propane-fuel appliances like hot water heaters. Detection units are useful for far-flung spots and in households with people who have difficultly detecting odors.