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Re above comment by redrovertdi about exhaust pipe that had been wrapped rusting, seems to me that this just indicates that the wrapping had caused the pipe to run red hot. This normally causes steel to flake. Note that cast iron is often used instead where high temperatures are expected, eg exhaust manifolds. It has a different problem. ie Being prone to cracking when temperature change is uneven. I am not sure whether stainless steel or other metals sometimes used for exhaust pipes are all prone to high temperature flaking.
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Wrapping
Sounds right that wrapping will increase corrosion because sometimes its wet and it holds contaminants dirt etc, close to your exhaust pipe. I'll have to cop that, in the interest of passenger comfort. My car has the original, (un wrapped), exhaust pipe on it and it's still in good shape after 19 years.
The exhaust pipe after the diesel turbo will rarely be in the visible, (red), range during normal operation. That's over 500 deg C 520 I think. The manifold is different because it's upstream of the turbo and can be 150 + deg hotter. The normal glass insulation tape & rockwool can burn, I saw it once at work, an industrial incinerator was out of control, and the top was glowing bright orange heading towards yellow. All the insulation was on fire.
I don' think we going to see those temps on the TDi. I'l go ahead with the wrapping, I have a 30 meter roll and some stainless steel cable ties to hold it on with. But while I'm there I'll look for heat shield opportunities.:)
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Just don't wrap the manifold, pretty sure you will crack it if wrapped.
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Don't wrap manifold.
Rick , agree with that, plus it looks like very hard work to wrap it as well.:)