Um... did the doctor not explain anything to you??
They put something over the open wound to protect it while it starts to heal... my doctor said within a few days it would start coming out, and would like kinda like chicken skin (ack! and it did!) I would imagine that's also where the "medicinal" smell came from...and the blood could be because that lining of medicine came off and it's somewhat exposed again, but starting to heal.
The discharge you are having is very normal. The side effects/discharge from the leep was a lot less then my colpo. I hope you experience the same. The healing process and pain was a lot less too. However, I believe my doctor over did it when she did the colpo...she took several biopsies. I have had two colpo's in the past and one leep. Discharge discharge discharge discharge.... : )
as long as it doesn't smell bad you are fine
one more thing...I will say I had discharge for almost 3-4 weeks after my leep. So what you are experiencing is completely normal. You are just healing. I had all these questions last year. I had my leep 03/2005. I am now going through this all over again. Hopefully I won't need another leep.