The belt rolls because of wear or because the drive is incorrectly set up. It isn't the rolling that damages the belt primarily - but if it has been run in a rolled condition long enough to smoke and smell, it is probably ruined. More likely it was ruined in the first place and that is why it rolled. Check whether the belt is bottoming in any of the pulleys, whether the pulleys are worn out, and whether they are in proper alignment with each other.
The Greenfield treats its propulsion belt rather oddly, in running it around a couple of right-angle changes of plane - the clutch pulleys have horizontal axes while the engine pulley has a vertical axis - but I haven't read any reports of members here having problems with that belt. Sounds as if it may be a problem with the pulleys, or the wrong belt (too narrow and hence bottoming in the pulleys) or lack of belt tension.
