Oh, up until recently the bedding was great. It's only because of this strange smell (which, BTW, dissipates to near invisibility if you store it out of the plastic) that it's questionable now.
I find that if you get it out of that bag ASAP the smell drastically reduces, indicating that it might be something in the plastic and not the shavings. Hopefully Kaytee will give an answer. Keep bugging them!