I just bought a 87' LX coupe automatic with a cobra intake and exhaust with dumps but it is leaking oil into the exhaust and has a minor knock. What could this be. Is this really serious or just a gasket not properly installe.
Are you sure the oil is not running down the exhaust?
The knock depends on how loud/solid and where it is at. If it sounds like a tick or tapping on a body panel with a wrench them it may be a roller/lifter which is no big deal but if it is a solid thud sound it may be deep inside and require machine work and a re-build. Either way, I would get to the bottom of it... You can get a long screw driver and stick the handle to your ear and touch spots on the motor with the tip and see where the noise is the loudest (or buy a mechanics stethoscope).