Exhaust: The saying is "what goes in, comes out", and that's how we start the section on the exhaust system. I would first recommend that you read my tech article on exhaust systems. It will give you some background information concerning selecting exhaust systems in general, particularly size and type.
What makes this part of the conversion difficult is that there are no readily available exhaust systems for the Type 3/Type 4 conversion. You will have to be creative with the stock pieces and the readily available aftermarket parts. We'll look at the exhaust in two pieces: manifold (usually referred to heater boxes or jtubes) and the exhaust system itself.
The exhaust manifolds bolt to the exhaust ports underneath the heads and generally do a 90° turn to exit back. There two basic manifold suitable for the Type 3: the Bus/Type 4 heater box with twin port flanges (used through about 1974) and the later Bus single port manifold that exits towards the front. This later system merges the two exhaust tubes into one flange. Either system should work for a mild street application. Dan Zink removed the heater sheetmetal to just have the bare j-tubes for his Notch.
If you are looking for a higher state of tune than that, with a large camshaft, large valves (48x38, 50x40) and an insane displacement, you'll need to make a manifold out of larger tubing. They will need to mimic Dan's j-tubes mentioned in the previous paragraph, only with larger tubing. This is best left to an exhaust shop that knows what they are doing.
It should also be mentioned that one difficulty you may run into with the exhaust is the header/muffler clearing the rear body. The modified j-tubes mentioned above have been shortened 1" to bring the header closer to the engine and away from the body.
All of the people that I've talked to have used exhaust systems designed for the Bus. The Bus exhausts are designed to clear the fanshroud and still not stick too far beyond the body. For most Type 3 conversions, the header/single quiet pack muffler for the '72-'74 Transporters seem to be the best option. It features a 4-1 collector, inexpensively priced and easily modifiable for different muffler. This picture shows the header and Yoshimura motorcycle muffler that Dan Zink is using on his '65 Notchback. The finished exhaust looks good on the car.
The Bus Monza system is also usable, though the exhaust tips seem to stick out a bit too far and it's way too restrictive to get the most power out of your engine. I'd stay away from these exhausts, even if you are not looking to win a drag race, as the most efficient exhaust will reward you with better gas mileage, better smooth drivability, and cooler engine temps.
So, for the exhaust system it pays to do some careful measuring and trial fitting. This careful preparation will ensure that you have less problems after the engine is installed and running.