98 Cherokee A/C Burning Smell, Grinding Noises... :-/

1998 Jeep Cherokee, 4WD, 147000 miles, inline 6. A/C stopped pumping cold air recently, then started to smell very bad shortly thereafter. Smells sort of like burning (maybe rubber? mostly just a burnt smell), nasty when the A/C is on, and faint when it's off... and I did notice a new set of marks/stains under the hood directly over the belt that runs the compressor, like it had spattered up onto the underside of the hood. Now when I start the Jeep I hear a terrible noise that sounds sort of like a grinding noise, most predominant when starting, but also there a little at idle. The kind folks at Jiffy Lube told me that the compressor failed, something about a clutch, something else about a blown fuse and that it's just an A/C problem. They didn't really talk much about the noise. What I'm wondering is, is this really just an A/C problem? I'm ok with sweating for a little while while I save money to fix an A/C, but I'm not into getting stranded on the side of the road, doing a get-my-crap-out-of-the-jeep-while-it-burns-to-the-ground dance. Obviously, I'm auto-challenged. A little help here?

Thanks!
chris.