I have an Insinkerator hot water dispenser and the water stinks and tastes as bad as it smells. The unit is about 3 years old. We have tried running it until the water is cold, but no help. I know of two other units with this same problem.
Delime it, (Lime Away, CLR, Vinegar if nothing else) I'm sure it needs it after three years. Then fill it with bleach to kill the harmless bacteria living in it and causing your smell, let it soak then flush it out.