This threads a bit old but how did you get on with the Pace???
That dry black soot is pretty standard, more due to jetting than blowing smoke. Its definitely worth a shot at getting it running.
The original mufflers on those motors all had a deflector over the muffler outlet.
What Ive done in the past with the old 4 stroke Victas is just buy a large radius 90deg Galvanized steel bend from the plumbing shop. Screw that in the block then screw the muffler onto it. Instant hot rod.
