exhaust leak

so i kept having an exhaust leak and got under the car took the h-pipe off and still couldnt figure out what was wrong. well this weekend i was taking off the tranny to replace the clutch and found this....

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how could i have missed this??? well tomorrow i'm welding a piece of sheet metal to close the hole and welding the pipe back on
 
well i'm planning on taking out the whole back plate of the muffler and welding some sheet metal to it. then welding the pipe back on(it broke off while we were changing the clutch

Good god! Why not just go down the local auto parts store and spend twenty bucks for a new cheapass muffler? As previously stated, the inside is going to be worse than the outside. Why waste the time f-ing around with something like that?:shrug: