Hello, I'm new here. I just found out I have a oil and water leak. Repair man told me it would be 1300$ to repair it... and was wondering how I would be able to do it myself because I don't have the cash for it.

Also, I opened this up.. but it doesn't look normal... what part is this? is it suppose to look rusted and corroded inside like this?

 

Hi, welcome to the forum. One thing you might do is post a little more about your specific problem with your car. Give some details like engine size, location of the leaks, etc., and some pics like the one you included. The crud in your radiator doesn't look good but it looks as if it can be flushed. Your coolant should be either green, red, orange or whatever color antifreeze that was used. (Prestone is green, other mfgs. use different colors) If the coolant is not clear enough to see through, it definitely needs to be changed. Is your coolant leak internal to the engine or external like around the water pump, thermostat, etc.? It could be any one of a number of things from a pinhole in the radiator to a bad hose.
One other thing is to get on the proper form thread for your year Mustang. The users in the forum for your year Mustang may be better able to answer your questions. Also, you might ask the mechanic you spoke with for an itemized list of what he intended on replacing and the cost breakdown for each part with the labor broken out for each. That way you can fix the easy things yourself and leave the hard stuff to the mechanic if you so desire. By knowing what parts are going to be replaced, you can go parts shopping yourself for better deals. This will save you money on the repair cost. Repair shops not only make money on the repair labor but usually anywhere from 10% to 25% on the parts as well.
Check out Rock Auto for auto parts. They have been really pleasant to deal with.