ORIGINAL: proptop
If it's an Evolution engine with the stock muffler, the gray gunk is probably being caused by the aluminum baffle disc in the muffler.
I would dis-assemble the muffler and and check...if that is the case, remove the disc...
Nope, that's not it.
We've verified that the gunk is not caused by the baffle.
You can substituted a different muffler without a baffle and still get the gunk.
I've done this.