Sounds like she has a skin infection causing the odor and hairloss. This could be due to allergies, a low thyroid level, or just having really dense fur (if she does) that doesn't dry quickly allowing bacteria to grow, an infection with mange mites, ringworm or fleas can also trigger this sort of problem.
You can read about mange mites here
http://www.marvistavet.com/html/body_sarcoptic_mange.html
Or a skin infection with ringworm here
http://www.marvistavet.com/html/body_ringworm.html
or a bacterial skin infection
http://www.e-doc.co.za/modules.php?name=News&file=article&sid=396
If she is not on flea prevention Frontline may help her.
You might try a Malaseb or Chlorhexiderm shampoo from the pet supply store. Follow directions for use on the bottle.
But I'd plan a vet visit to check out the skin problem which might include skin scraping for mites or checking with an ultraviolet light for ringworm to help determine what the problem is. They may want to run a blood test to check for low thyroid which can trigger skin allergies.
You can read about allergies and dermatitis in dogs here
http://www.lbah.com/allergy.htm
http://www.priory.com/vet/vetatop1.htm
Hope this helps you!
Dog Expert:Rescue, Train,Breed,Care
30+ yrs dog home vet care & nursing, rescue, behavior&training, responsible show breeding, genetics