That's a spiffy pony you've got there! The Rat Rod guys will really like the bullet holes.
I've been working on my '70 Mach 1 for over three years now. (Sheesh!) I went round and round with what to mod and how to build it. Based on what I went through, here are my polite suggestions:
- Kelsey Hayes four-piston calipers up front. I recommend Chockostang for the kit. Since your wife will be driving it, you might consider the power disc brakes. These are very good brakes and are less expensive than the flashy Wilwood stuff and similar kits. You don't need sexy brakes. You just need good brakes. (Since your car is an I-6, I think you'll need new spindles for any disc brake kit, but I'm not sure.)
- If you're on a budget, don't bother with rear discs. They look cool and they're easier to work on than drum brakes. But unless you're doing some serious track events, you likely won't get much from rear discs. Drum brakes aren't sexy, but they actually work very well when new and properly adjusted.
- Just buy a 9" differential for a Mustang with a Traction Lok or a Truetrac and bolt it in. You can order them online, ready to go. Since you'll need a new diff with the V8 swap, I wouldn't bother with Explorer rear differentials or some other swap. Install the 9" and call it done. This isn't about being sexy. The 9" was available from the factory and it's simply bullet proof. It's won't cost much more than a lesser diff and you can upgrade your engine repeatedly without worrying about breaking the rear end. If you're installing an overdrive trans, you can go with any rear gear from a 3.55 to a 4.30 and be fine. (I installed a 3.70.) You won't need a Nodular Iron 9" diff.
- I went with the 4.5 Scott Drake, mid-eye leaf springs. Haven't driven the car yet, but those springs came highly recommended. Most people I talked to are happy with the 4.5 leafs.
- Up front, do the Shelby/Arning drop, roller spring perches, export brace and Monte Carlo bar. This is actually a very good setup for street and occasional track use. You'd have to spend a LOT more money to get something that works better. Yeah, all the cars on TV have fancy rack and pinion setups with coil overs; sexy, but you won't need it.
- Likely, your steering box is worn out. You can send it to Dan at Chockostang and exchange it for a rebuilt unit. You can also opt for a quick-ratio steering box.
- There's nothing wrong with the Ford power steering of that era. Yeah, you can install an aftermarket power steering setup. That will cost you more and involve more work. If you buy new, factory style parts and install them correctly, you shouldn't have any leaks. Consider most people who complain about leaking power steering are running components which are over 40 years old with over 150,000 miles on them. (Some people are fab'ing their own electric power steering. This might be an option for you. I don't know much about it.)
- Good shocks help a lot. I'm going with the Bilsteins from Shaun at Street or Track. They are calibrated for a Mustang. Be careful. There's a lot of hype in the performance shock absorber market. Popular name brands may not equal good performance.
- Rubber suspension bushings work fine. If you really want urethane bushings, use the Polygraphite bushings. They don't squeak. You can get them from PST or Scott Drake.
- For your V8, think hard and plan carefully. It's tempting to buy a high-end stroker crate engine. There are many good crate engines out there, but the costs add up fast. You can easily spend over $10,000 on an engine that sits on a stand because you can't afford to finish the car. There's nothing wrong with a 302 equipped with a mild street cam, headers and dual exhaust topped with an Autolite 4100. You can have a LOT of fun with this simple power plant. If you want more power, consider a similarly equipped 351W. With aftermarket heads, it can be a real screamer. But hey, if a 408 stoker is really within your budget, go for it. There's nothing like a torque monster!
It's easy to dream BIG with a Mustang build. Consider the bigger you dream, the more exponentially your cost and build time will increase. It's no fun looking at a partially built car on hold due to fabrication problems and a drained budget. (You'll find such projects for sale on Craigslist.) Much better to have a slightly modified car that's on the road!