i havent had the cash to up grade my cat back after my engine swap, so i still have the stock 2 inch cat back. how much is it hurting me? check my sig for my engine mods, im still debating on flowmaster or hooker........grrr so hard to deside!

Quite a bit. When you get it upgraded, you'll be amazed at the difference.

is it sorta sufficating the engine,,well more like choking it.....i mean i have the K&N so its sucks it in good,, then the headers to dump it out,, then BAMMMMM 2 inch....even though my y pipe is only 2 and a half inches. since thats 2.5, should i stick with a 2.5 cat back, or will it be better to get a 3 inch?

On my stock '86 T/A 305 TPI (174,563 miles at that) with only a conical K&N I noticed a huge difference when I installed the Flowmaster single 3" on it.Accelerated better and all around ran harder..one of the few times I noticed such a major difference like that.With your mods..you NEED to upgrade your exhaust.As soon as you can get rid of that 2" and install one of the many 3" cat back systems,you will thank yourself for doing so after you finally do it.

can the 2 inch be hindering my MPG?

Yes,the motor is choking and fighting to get the exhaust out..it's working harder than it should hurting your MPG.

ok, good to hear that i will be seeing better than 11mpg! im sure if i kept my foot of the pedal, it would be better,, but ohh well!
thanks guys.....also,, i dont want this to start into a big "what muffler is better" thing, but i wnat to know what you guys think. i like the sound of both of then, and i heard the flowmaster is more restrictive than the hooker. but i have also hear that the hooker has instalation problems......so hard to pick