2002 Ford Mustang Manual V6 3.8L with 60,000 miles

My car is acting a little funky. I hear a sound similar to water running through pipes. It is fairly consistent and seems to change/die down when i press down the clutch. There is also a squeak in idle that seems to disappear once acceleration is initiated. Thinking its in the clutch/transmission area.

I popped the hood to see what the problem could be if it was inside the engine. It appears that the a/c pulley (top left pulley when facing car) area is making a burning smell. Maybe the clutch? No leaks thus far from the engine, but it could be on it's way out. Seems like the car has lost a little bit of its power as well.

Besides that, it runs like a charm.

Any ideas?

 

Does your a/c work?