When lakes smell bad, we notice. Some basic knowledge of sources of odor may help lake enthusiasts identify odors. Odors can be classified according to some complicated systems, but for our purposes we will stick to some basic descriptions.
Most people recognize “rotten egg” smell, which is hydrogen sulfide (H2S). It is formed when sulfate is metabolized in the absence of oxygen, usually in the bottom of a stratified lake. We sometimes smell H2S around salt marshes, as there are more sulfates in saltwater. In lakes, the presence of H2S means that oxygen has been depleted and the demand has become so great that sulfate (SO4) is being broken down. Other oxidized compounds are usually broken down first, such as nitrates (NO3), so oxygen demand is severe if H2S is being created. Most often the H2S is smelled in bottom water that has been sampled; the H2S tends to stay trapped in the bottom water layer until fall mixing. But with a mixing event, the smell can become detectable.
Certain cyanobacteria (blue-green algae) produce odorous compounds, specifically geosmin and methylisoborneol (MIB), which impart a musty to grassy odor. Often the offending cyanobacteria accumulate as a surface scum, making the odor obvious to those using the lake. If cyanobacteria are abundant enough to produce odor, there is legitimate concern about toxicity, but it is important to know that production of odor and production of toxins are not linked. Still, if enough cyanobacteria are present to create detectable odor, there are enough to create toxins above a safe threshold IF the cyanobacteria are toxin producing forms.
Other algae besides cyanobacteria create odor. Actually, any algae will produce some odor if abundant enough, but certain algae can produce specific smells when abundant. Most notable are certain chrysophyta (golden algae), which produce odors such as cucumber, violet, spicy or fishy. No one is likely to confuse these options with a wine tasting event.
Finally, dead algae tend to give off foul odors usually described as septic or decay. Dying filamentous green algae are particularly malodorous. If mats wash up on shore and start to decay, they are likely to be very noticeable to anyone with a nose.
A good reference to check if you want to know a lot more about odor in water is the American Water Works Association publication M57, called Algae: Source to Treatment.