I had not really considered the possibility of the the rest of the exhaust path overheating. Although I don't think it would actually catch on fire (but I admit I could be wrong) I would be concerned about melting or deforming the water muffler because you may have a hard time finding a replacement if you need one. You may be able to extend the water line and attach it to the drain port of the water muffler instead of sending it overboard. That way you would have water in the water muffler and in the exhaust path from the water muffler back. That migh help reduce the risk of overheating something.