Oil leaking from muffler

Worn piston rings and possibly a worn block.
 
Remove head, check for a wear ridge on the top edge of the cylinder. 
 
If not too bad, remove piston to access worn rings...
 
Also note, not related to your issue, that the 3 head bolts, closest to the exhaust OFTEN LOOSEN UP
and cause running issues and leaks..
 
.

Worn piston rings and possibly a worn block.
 
Remove head, check for a wear ridge on the top edge of the cylinder. 
 
If not too bad, remove piston to access worn rings...
 
Also note, not related to your issue, that the 3 head bolts, closest to the exhaust OFTEN LOOSEN UP
and cause running issues and leaks..