This is what I spotted with the mirror & flashlight. These black streaks are only formed by exhaust leaks. The reason it occurred is that Jasper put exhaust manifold gaskets on this engine when they installed it. If they had used grease like Ford does, and torqued all the bolts properly (the rearmost was loose), or if they had used modern hi-temp silicone, there wouldn't have been any leak.
In addition to venting toxic gases forward of the cabin where they might enter the ventilation system, exhaust leaks also affect the way the engine runs. The addition of unmetered air between the combustion chambers & the oxygen sensor(s) creates a false reading, indicating a LEAN condition. In response, the EEC will adjust the injector pulsewidth to add fuel and bring the mixture closer to ideal. But since the reading was false, the actual result will be a severely RICH condition, causing (among other things) low economy, black soot, elevated HC & CO emissions, increased blowby, diluted engine oil, and accelerated wear on all the bearings & rings.
Before ripping out any emissions systems, read
this article.
