Rick,,,
If you do a 3" inlet, and a dual outlet, and run 2" pipe, you should be ok with the bottom end... I just wouldn't go past 2.25 ... The 5.3 has low VE off-idle, and it's a fat truck... The oem system is really great for TQ from idle to about 2,000 RPM... The the oem muffler starts to build pressure fast, and the PCM for one will trim back to make an even power curve to redline... All a increased flow exhaust does for power, is allow the motor to flow max cfm at any given rpm within the limits of the PCM, and the motor's VE at a given rpm (the simplest analogy, is a pool pump... A pool pump say is designed to pump a max amount of 100 gallons per minute... With this, it needs a 1" inlet, and a 2" outlet say... If you put a big 3" inlet on it, it will not have proper head pressure to feed itself, same thing with the outlet, if you have a 3" outlet on that little pump, it will not run well... You have to match the inlet, and outlet's inner surface area to match the pump's ability... Now a little vaccum on the inlet, and a little back pressure on the outlet, will allow the pump to run more effeciently, and have great reaction time or response... In a nutshell not taking into account frictional properties and heat, this is the goal... The goal also is to create that outlet restriction as far from the motor as possible but, to retain velocity without choking at the end... It's complicated, but then again it's not... The 3" system is where frictional/heat issues are capitalized on, and better velocity is retained throughout the system... You can;t confuse a tru dual system with a single muffler dual outlet system... they are entirely different... A single into dual outlet system is pretty innefecient if you compare it to a single system... as far as friction/velocity/heat goes) ... A 1,000 cfm muffler does no more than a 700 cfm muffler on a 5.3... The Gibson is designed to make good grunt from idle to about 3800 RPM... The 5.3 makes max power at about 4800, so the Gibson is close to a perfect match... In the single swept side... But, if you plan on long tube headers, or a blower later, it's not the best choice...
The Flowmaster 70 series flows a little more than the Gibson, an I think it's probably the best choice for you... I just can't recommend their KIT because I and others have had problems with fit...
If you want to do a custom set up, with dual outs, I would get a Flowmaster 70 series, 3" Inlet, and dual outlet... run 2 1/4 pipe from the muffler... (have the shop expand the 2 1/4 to fit inside the 2 1/2 outlets of the muffler... If you do a Magnaflow or any straight through type muffler, run 2" outlets... A chambered muffler is gonna do some restricting for you and they will tolerate 2 1/4 where a straight shot muffler won't ...
NOw, if the shop is crush bending the pipe, and not mandrel bending it, you can add 1/4" to whatever I tell you here... Meaning if the shop is putting in a magnaflow, and crush bending, then you can do the 2 1/4 outs... If they are doing a Flowmaster 70, with crush bending tailpipe, you can run the 2 1/2 ... When I mention pipe size, I default to mandrel pipe where it is never crimped...
Considering your dilema, if you want a kit, do the Gibson single swept 3" in stainless or alumized ...
If you want dual outs, go custom only... If you do a straight through muffler stick with 2.0 Inch tails ... If you do a chambered muffler like a Flowmaster 70, you want to run 2 1/4" pipe... These are mandrel bent sizes...
If the shop doesn't have a mandrel bender (which I would try to find) then crimp bent pipe, you can add 1/4" to the numbers above...
But, I will say, a 3" kit will make more overall HP, and Torque ... There are dynamics at work here that are hard to explain... I have the best flowing kit available for the 5.3, and it will support a blower too... But, the muffler internals are designed to keep good back pressure normally aspirated too ...
I have the Magnaflow single 3" center in / center out 3" ... with 3" tail ... The muffler (12579) goes from 3" inlet to dual 2.5 inch pipes inside the case, and comes back out single 3" ... The exhaust hits a small smooth rounded V block at low RPM, and as exhaust gasses increase in volume and speed, and decreases in pulse width, the V block is overcome, and the muffler flows like crazy... But it does resonate inside a bit ... ?
Now to answer the question about stainless factory exhaust... The part that is stainless is the Y pipe assembly that comes off the exhaust manifolds, and meets together at the Y flange where it connects at the mid pipe... The Mid pipe, muffler, and tail are aluminized ... Technically aluminized is not stainless steel, but pretty good as holding off corrosion... So it's "partially stainless" ... At least on the 99,00, 02 trucks I've had ...
11H