Are you certain it's the wood? Is there any chance food/detritus/waste is getting trapped underneath it? Does it do this when soaking in a bucket by itself, or only in the tank?
Wood shouldn't have much of an odor when it does decay - it's almost entirely carbon, hydrogen, and oxygen, there is very little sulfur (compared to say, food, feces, dead critters, etc.) available to produce strong-smelling compounds.
It might be worth taking it out and giving it a good boil or two, and seeing what happens.