We cut the muffler off after work tonight to inspect the carnage and it's about what we expected. We plan to weld a plate to the area above the rust and tie it into the control arm mount or whatever that lower structure is called. Not much time this week but we hope to start welding by the weekend.
We found a new muffler and tailpipe on ebay that are supposed to be direct replacements, so we'll see how that goes in the end.