Well, I know that even on low beam, the headlight lens gets pretty warm so melting housing is possible I think
It can't be because of the engine, because literally after 30 seconds of having the bike running (baring in mind the headlight comes on with the ignition) I could see the smoke and smell it and the engine would still be cold.
So it has to be the headlight I'm thinking, even the exhaust headers would be cold then!
Guess I'll have to just suck it and see