Subaru Repair: 2005 Subaru impreza w/ loud knocking and loss of power, subaru impreza, cursory check

Question
I've had my Subaru since I bought it new in 2005.  I've always done all of the scheduled maintenance and taken good care of it.  Recently, after driving a block to the store, the minute that I started the car, a loud knocking sound came on and I could smell smoke (perhaps burnt oil or rubber?.)  The check engine light was flashing and the sound was like something spinning around smacking against the engine, so I opened the hood expecting to see a belt out, but they were fine.  I did a cursory check of all the fluids and everything else was fine too.  I slowly drove it back to my house, but now I'm afraid to even drive it to the mechanic. I really love this car, but being a college student, I don't have a lot of cash to repair it.  Please give me some good news and let me know that its an easy repair.

Answer
Couldn't tell you much without hearing the engine run but if you gut tells you to have it towed I would have it towed.  I am not sure what it could be, I have seen the balancer come loose, if it did it would leak oil from around the seal, and that could cause a burning smell.  Hope you get it fixed!