I pulled off the aftermarket pipe from previous owner and it almost looks like there's been two layers of metal tubing welded inside of the header.  Is it supposed to look like this? see this causing any problems for me when installing dyna pipe on there?

yes, normal, if you look even further down you will see it narrow even smaller ...

I did the DYNA swap, no issues, there's a thread on here somewhere with all my details; clamps, parts needed, pictures, etc and where to get stuff for the swap. Also a bunch in the Tech Section too