I dry pail. Always have done and have had no issues with it.
I usually rinse out the buckets with boiling water and tea tree oil when I'm washing the nappies which keeps them clean and nice smelling. The buckets only smell if I haven't put the lids on tightly enough!
We dry pail also! Try putting a couple of drops of tea tree oil on a cotton wool ball in the lid of your bucket. That way when you open it you get the tea tree smell rather than the nappies and it has anti-bacterial properties. A good hot wash with soapy water every week keeps it clean.
Tea tree oil and lavender oil. Have used Olbas oil when desperate! I also don;t like the idea of using chemicals. Have you tried the Asda Eco washing liquid (for washing, not soaking) - it smells gorgeous, leave nappies all cinnamony, and gets poo out at 30o!