Mine was dented the same way, at the same place.
The previous owner had wrecked the xj, and i believe the dent was caused by the front drive line.

I straightened it out, and never noticed any difference in performance, or mileage. I'd say dont worry about it, because there are already factory bends in the pipe, where it also is pinched almost as much.

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94 YJ. no lift...YET