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Yeah that is definitely the aftermath of loose sprocket bolts my friend! I've seen it happen quite a few times. That should always be part of your pre ride check list to check before every ride!

To be dead honest with you the absolute best pipe/silencer combo for a yz 125 is bone stoke, but just modifying the silencer a little bit, I say this with lots and lots of experience being around the old factory yz 125s of the Yamaha of Troy days, keep the stock pipe and cut the stock silencer down 5 inches...