the smell can be the sump sitting with water in it... you can tank aquarium water, not tap. to rinse out all of the poop etc.. which will tank the smell away... cleaning the filter.
then if you choose to add the carbon, add it to the top, where the exit point is where the "clean" water goes into the tank.
the thing with carbon is that you don't need it IMO, just need to clean the filter. b/c when treating fish some something the carbon takes away the med affects, and i just find carbon a waste.. but to each their own.. if the cleaning does not help the smell, then add it in.
*** it also depends if you have a fresh or salt tank.. if it is fresh do what i wrote.. if it is salt then i believe you need a good protein skimmer to reduce all that "stuff".. but don't know much about salt...
ha just saw your post on seahorses... don't know if that relates or not