Theres a small amount of rust there, I will be taking care of it after I take care of some more pressing issues.
I finished the exhaust this weekend. I went from the engine back with 2 inch stainless, with a center flex joint added, a center glass pack, and a 2 1/4 magniflow muffler. It sounds like a subaru that is for sure, its very quiet cruising, but sounds decent when you get on it. It woke it up a lot over the factory restricted exhaust, and the crap carburetor.
I didn't have the rear muffler at this point, so this is where I stopped on friday. I went home to find my new muffler there, came back to work on Saturday and finished it up, along with change some fluids, and adjusted the carb some. I still have a little more to do, but is running very well. I ended up putting over 150 miles on it this weekend. Up next I need to fix some of the drivetrain issues. Lf cv joint makes noise occasionally, the clutch is pretty grabby, and the trans is pretty weak, but seems better after the fluid change.