Exhaust gasket replacement failure.

The busted off stud can be gotten out pretty easy. Start with a small drill bit in the center (use a punch to mark the center) then work your way up so the hole is one size smaller than the stock threads the run a tap to clean out the threads. You may want to go one size bigger than stock just to make sure all the bad threads are out. You can get new studs at any hardware store, I get mine from the local Ace Hardware because they are stronger than the cheap ones that Home Depot or Lowes sell.

When I lived in Richlands/Jacksonville NC we had a back woods garage that would pass our cars if the lights and horn worked and we gave him a case of beer.