my 94 cobra came with factory 2.95 first gear. Yours is doing exactly what happened to mine in my cobra when i bought it used. It had gotten run low on ATF and was burnt up. I ended up calling Hanlon motorsports and ordered a complete rebuild kit, new cluster shaft, input shaft, new fifth gear, but the best thing i got was his How To Rebuild A T-5 video, it was great.
No it didn't. The 2.95 gearset was ONLY used in 83-85 non world class t5's and nothing else. The 2.95 gear ratio you're referring to came on what you're thinking of as the t5z trans, which was a ford racing catalog order only tranny. NO oem ford ever came from the factory with a t5z.
The 93/94/95 cobras shared the mainshaft and pocket bearing that the z trannies had, but the gearset was still the standard 3.35 world class gearset, and not a t5z trans. That pocket bearing adds maybe 10-15 pounds more torque rating to the trans, but that's it (maybe a little more reliability)
I also have to completely disagree on the above t5 not being worthy of a rebuild (based on what I've seen so far). I build these things on the side for the local mustang community just as a hobby, and you wouldn't believe some of the t5's that I've saved b4.
What you need is a simple inspect and replace. If there was no grinding, then you're ok to re use your existing syncro's. The bearings can also be inspect/replace as necessary, but to be on the safe side, since you had noise, a new bearing kit is very cheap.
A used input shaft can be had for $50-75 tops from a local trans supply shop(if you don't know one, try anaheim gear, they'll ship, or call a local trans shop and ask where they buy their parts from, then call that place), and "if" you need a new cluster shaft, they can be had used for $50-100. I buy them new locally I think for $100-125 if memory serves.
a NEW t5z will set you back $1300 plus ship.....
before you trash that thing, tear it all down and inspect everything closely. If it's not all burnt up, then rebuild it.
If it is burnt, you can get a 2.95 t5z gearset to add into that yourself to convert it over for $400 for the import gears (I've built 5-6 of them with no issues) or $500 ish for all tremec,....and this includes NEW 1,2,3,gear, new 4th/input shaft, and a new cluster shaft...re use your main shaft, case, sliders and 5th and you've got a z spec upgrade for $500 plus your time...plus new bearings or whatever else you need.
gearbox.com has these kits available.
this is the rebuild kit i'd suggest
under $600 for everything, do it yourself, save $700