This is a cautionary tale and a question about the cause of the fire.

I bought an 87 with a bad head gasket. Smoked badly - I assume much vaporized antifreeze in exhaust.

I decided to swap the motor instead of replacing the head. I did that and got it running yesterday.

It still smoked from the exhaust. More and more as it warmed up. Burning off coolant that was in the system I thought. I noticed a few sparks come out of the tailpipe. Smoke got worse & worse in my shop.

I then realized via the smell that it was something else. Looking underneath I saw that the undercoat on the floor pan from the axle to muffler was burning - flames. I rolled it outside, jacked it up, put the fire out - although it mostly died by itself once the engine was shut off.

I think either (or both?) a) oil worked it's way past the head gasket into the exhaust system; ignited in the muffler when I ran the car; heat from that ignited the undercoat; or b) coolant clogged the cat and it overheated it (although the fire seemed to have started between the driveshaft and muffler - well behind the cat.

I favor (a). I think the oil did not ignite before (when the head gasket was bad) because it was mixed with coolant and the system couldn't get hot. But once fixed, pure hot exhaust fired up the oil residue.

Comments on these and/ or other possible causes? Note also that fire happened in ~5 minutes ie. with the car running (and smoking) I got underneath to look at the exhaust: it was not overly hot and no signs of undercoating being heated up. 5 minutes later it was on fire. So probahbly I just happened to look at it just before the oil was about to ignite.

It could have been ugly: one of the fuel vapor lines was melted so it could have ignited the vapors or, worse, burned through one of the fuel lines causing gasoline to be sprayed into the fire. Something like using a flamethrower on a hot tar roof.
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240s: 2 drivers and some parts cars