WHILE ON A PERSONAL FLT IN NORMAL CRUISE AT AN ALT OF 1000 FT APRX 2 MILES SOUTHEAST OF THE ARPT, THE ENG BEGAN TO MISFIRE AND THE CABIN FILLED WITH SMOKE. THE PLT ELECTED TO LAND IN A CLEARING. THE PLT ALSO STATED THAT THE ENG WAS LOSING PWR AND THT A/C COULD NOT MAINTAIN ALT. DURING TH ELNDG ROLL THE NOSE GEAR BROKE OFF AFTER HITTING A SMALL RISE IN TERRAIN. THE A/C NOSED OVER & CAME TO REST. POST-CRASH INSP REVEALED THAT THE MUFFLER HAD SEVERAL PIN SIZE RUST HOLES WHICH PERMITTED THE EXHAUST TO BURN THROUGH THE SHROUD AND MELT THE LT MAGNETO WIRING HARNESS INSULATION, VOLTAGE REGULATOR WIRING AND BATTERY WIRES FROM THE GENERATOR. AFTER REPLACING THE MAGNETO WIRING HARNESS AN ENG RUNUP WAS ACCOMPLISHED WITH NO PROBLEMS NOTED. THE MUFFLER SHROUD WAS MADE OF ALUMINUM RATHER THAN STAINLESS STEEL.