Idler Arm hitting exhaust?

Hi guys

after driving for a while in my car i heard what seemed like my exhaust gasket was leaking (just changed it couple weeks ago)

after looking/hearing around the passenger side manifold (where the gasket leak was)

i noticed it came from under the car..

after further inspection i saw that my idler arm is rubbing against my exhaust tube! and that the grease nipple of my idler arm had rubbed a slit in my exhaust pipe!

i have a rough understanding of the suspension on these cars, but how on earth is it possible for this to happen??!
The pipe was custom made and is not correct. It should be more inboard and up further closer to the bell housing brace.