Thanks to all your help and patience, my baby is running again after replacing the timing belt, water pump, coolant, drive belts, valve cover gasket and spark plugs. This is the first time I have ever done anything beyond checking the oil and coolant on any car. Thanks everyone!
Here's my question...
I just noticed water and oil residue on the cement right under the exhaust. Is this normal?

 

under the muffler? I believe most mufflers have little drain holes in them to let moisture out.

 

If its just water, then thats condensation.. Normal in other words.