I have a Hobo clone that did the same thing but I noticed that burnt taste and smell before It got to the point that yours got to. I try to keep the
coils farther away from it. But from the looks of yours I would be leary of using it. I thought I seen replacement insulators some were but can't recall where. Might be able to make one too. but for the price of clones I am not sure its worth it.