Posted by rfvv on Thursday, November 5, 2009 at 10:30pm.
#3 is correct; the others have punctuation issues.
Because "What a nice smell" is something you would say with excitement, #3 is correct. If it were another quote like, "I like your shirt," it could look like #1 or #3 because it could be meant enthusiastically (exclamation) or not (declarative).
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