First let me say I am a diabitic. On my third toe right foot I was losing my toenail when I came in from work I removed sock an my was swollem about three times it normal size I squezed it and a foul smelling liquid came out.. the top of my foot is also swelling.

Get yourself to a doctor immediately. Any damage to the feet of diabetics is cause for concern, but it appears you have let this one go too long. The foul smelling liquid was a very bad infection.

Oh, I don't even know if I would wait for a doctor. This is one time I would actually suggest going to an ER.