That can be a nasty job, but very worthwhile. I did the FMF sparky on my XC 200. It was just as bad as you describe and the old stuff wasn't steel wool. But whatever it was, it was well baked on. Took some time to get everything cleaned up properly.
Nice results though. A more mellow sound and, I swear, better low end response.
My wife did comment on the smell, but manly wasn't the word she used.
RB