Well thanks guys, I've figured it out. The clutch hasn't been hanged, ever. I noticed the smell and correlated the with the rough shifting and found that y clutch is alomost fried. It's kind of convenient because my tranny is going out too. Time for a NP4500 with an Atlas II and a centerforce 3.
'89 YJ w/ 4.2L I-6, 2.5" Rancho SL, 2" BL, 1.25" SHKLL, Uniden CB, 2 JL Audio Subs and Banpass box with a 300/1 2 channel Earthquake Amp, 33X12.5 Cooper S/T, no sway or trac bars, no bump stops, 2 titanium KC's.