At idle with the clutch disengaged the 95 to 01 KDXs sound like there's Diesel idling off in the distance. This is normal. You can quiet it down by adding oil to the top of the sight glass.
The oil you are talking about is commonly known a spoog. It's the left overs from incomplete combustion. If it's leaking from where the pipe enters the cylinder remove the pipe, replace the o-rings, run a bead of silicone around the o-rings and reinstall.
If its leaking from where the silencer and pipe come together remove the silencer and insure the blue rubber gasket is installed properly, one side has a smaller od that the other. You might also consider using some silicone in this area as well.
Good luck with your KDX,
David