This shows the true extent of the problem caused by the gaskets. Notice the #4 port to the Left - it also has soot spots appearing on the head where the gasket material was breaking down.
The immediate effects of this leak were:
1) noise
2) risk of exhaust fumes (including Carbon monoxide) in the cabin
3) risk of heat damage to surrounding parts
4) excess air in the exhaust, causing the HEGO to report a false lean condition to the EEC, which compensated by running unnecessarily rich: lower economy, higher emissions, accelerated engine wear
If it had been allowed to continue, it could have burned the valve or washed out the rings, causing catastrophic engine failure. Those are probably among the reasons that Ford didn't put exhaust manifold gaskets on most of its engines.
Before ripping out any emissions systems, read
this article.
I didn't fix it on this truck, but the evaporator insulation hanging down in this pic can be replaced with a more-robust modern material, like this: