I've repacked the muffler on my RM125 before, I bought some packing though and it cost $10, it was made of this fibreglass mat, you can buy a fluffy one that's not bound together, probably works a little bit better but is harder to work with, the mat one is kind of like a thin pillow without a pillow case on. You just cut the packing to size then take your core out and wrap the packing around it, if you have an oval shaped muffler or something other than a circle you can just cut strips of packing and put them where it needs to take up the extra space as you wrap the main packing around, then you can get a little bit of wire and wrap it round the packing to hold it together when you put it back in the main tube, I didn't do that though I just held the end and helped it in by squeezing it. Gave the bike a nice sound, doesn't sound as tinny as before. Just need to do it to the pit-bike now coz it currently has no packing in it.
When you put the proper bought packing in don't squeeze it too tight, but also not too loose.