Well, first of all, you can mount the engine any way you wish to. You can orient the engine mount pretty much any way you wish, but it requires some modification to the firewall to accomodate the mounting bolts. You will have to punch out the old blind nuts, patch the holes, then re-drill out the new holes and pull through new blind nuts. It's a bit of a chore, but you can do that.

This would help you mount the engine so that the muffler will exit out the bottom if you wish.

But, to answer your first question, though, the muffler can exit anywhere you really want it to, out the side, if that's how it is intended to be, but it shouldn't be inside the cowl. It will make quite a mess if it was inside the cowl.

CGr.