Tried steel wool in 2 stroke glow exhausts quite a few years ago. It reduced the noise level a fair bit, but had a tendency to restrict the exhaust flow a lot. I figure this was because the oil expelled by the motor coated the individual 'fibres' of the steel wool, clogging it up eventually, - used to ooze oil out for weeks after as well.
Why not try secondary expansion chambers attached to each outlet of the pitts exhaust. Good silencing effect with much less loss of power!

Regards

Andy E

PS You have to be REALLY careful that bits from the steel wool do not find their way back through the exhaust port, it aint too good for the piston and liner!!!