With the exception of one fruit, my general opinion is that if it smells bad, it is bad. That isn't to say, if I don't like the smell of something, I won't eat it. If it smells like it has spoiled, I treat it as spoiled. Having worked with caul fat before, I can say that it shouldn't smell rancid nor should the taste. I think that your butcher sold you some bad product. I would try and find another source. Caul fat is used as a wrap to hold things together while it cooks. If it adds it's own flavor to what you are cooking it wouldn't be right for the job. It should be fairly neutral in flavor and pretty much disappear when it is cooked - although you may see some traces of the caul, it should blend with the product. Dan