Option #2 might work. After it's drained, get a small, flat piece of steel and bond it to the muffler with J-B weld.

#3 would also be fine. Don't worry about it. You will get some blue smoke every now and then, but it's the cleanest option. The worst that could happen is if someone complains to the local auth. about the smoke (Assuming you have emmisions and vehicle inspections)