Volvo Repair: My Bloody 93 240 Wagon.-254K, dangerous situation, alternator

Question
Got into my car,and before I even turned it on, there was smoke(albeit a small amount) coming from the hood. Open the hood, small flame near my alternator. When I the car is on, The Check Engine Light is on. This has been on for ages. When the car is off, and with no key in the ignition, the battery and oil lights come on. The car starts just fine, but I am apprehensive to drive it (worried it will blow up). I just got my entire exhaust replaced... whats going on??

Answer
Hali, sounds like the bloke is bleeding all over the place. HA.  Sounds like a dangerous situation.  It sounds like an internal issue in the alternator. Check to see if any wiring is touching anywhere.  Disconnect the battery of course.  LEt me know.  Roger