In a gasoline engine, under ideal combustion conditions, the exhaust product would be CO2 and water. However, we seldom notice water in the exhaust stream in a warm engine because once the exhaust system heats up, the water becomes a vapor...yes, that would be steam. Auto mufflers used to have "weep holes" to let water that accumulated in mufflers escape...and when these mufflers rusted out, usually it was in the vicinity of a weep hole [not always, but usually].
When the exhaust system--short as it is on a Farmall with an upright exhaust--is cold, the water component of the exhaust condenses...and you get water droplets falling out of the exhaust stream. Also, when the engine is cold, it's more likely it will take some amount of choke to start the engine. With the choke partially closed, you're introducing more fuel with the same volume of air. Hence, you get slightly less complete combustion, and carbon particles ["unburned hydrocarbons"] are also in the exhaust stream. So when that cold water component condenses out of the exhaust stream, it acts as a "scrubber" and takes some of the otherwise unnoticed carbon particles with it when it falls from the exhaust stream.
Thus, your "water drops" and "black spots" occur more commonly when the exhaust system is cold. And since alcohol is hygroscopic [attracts water], it's only logical that gasolines blended with alcohol will have more water in the exhaust.
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Today's Featured Article - The Day Mom Drove the 8N - by Brian Browning. My Dad was wanting to put in a garden but couldn't operate the 8N and handle the old horse drawn plow he had found and rigged up to use with the tractor. Well, he decided to go get Mom out of the house and have her drive the tractor while he walked behind the plow. You got to understand that while my Mom is a hard worker who will always help whenever she can... she had never operated farm machinery before that day. Dad got her out there, explained how the clutch was the same as in our o
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