When a lawn mower engine starts, four components heat up -- the cylinders and pistons, the exhaust manifold, exhaust pipe and muffler. Fuel and oxygen are pushed through valves into the pistons, which compress and explode the gas, then force the gas out through the exhaust. Oil moves around the engine lubricating engine parts. If any part of this cycle is out of time, or parts are worn or damaged, you may find strange liquids coming out of your muffler.
One fluid you may find coming out of your muffler could be unburned fuel. This can be caused by a plugged air filter which prevents enough air getting to the pistons to fully burn the fuel. If the carburetor is out of adjustment or the float inside the carburetor is stuck, excess fuel can also fail to burn. If this happens, unburned gasoline can be ejected through the exhaust system, picking up carbon and making it appear black. If the liquid coming out of your muffler smells like gas, flooding is likely a problem.
Oil can seep into the exhaust system if the piston rings are worn or if you turn the engine on its side. The oil that gets into the pistons is pushed out without burning. If the liquid coming out of your engine is slick and smells more like oil, suspect one of these two causes. If you've had the engine turned over, the oil may burn off after running the engine a while. If it continues to leak from the muffler, you may need a ring job.
In damp weather or when the engine has been exposed to significant temperature changes, water may condense inside the muffler and exhaust system and then be expelled when you start the engine. The water will pick up carbon deposits inside the exhaust pipe and be blown out through the muffler. This is normal and one of the few types of muffler effluent you don't have to worry about.
Worn intake valves can prevent cylinders from sealing properly and also contribute to oil leaking into the cylinders or to incomplete combustion. Valve wear can also lead to oil or gas leaking from the cylinders into the muffler.
Liquid-cooled four-stroke engines, such as those in lawn tractors, can develop cracks in the engine block or parts of the cooling system, allowing coolant to leak into the exhaust, oil or fuel systems. Damaged gaskets may also allow coolant to leak from the cooling system into the exhaust system. A yellow or green liquid dripping from your muffler likely means you need to replace head gaskets, but can also mean major problems with your engine.