I got the clutch bled properly. Finally! I wound up having to take the hydraulic bits out of the car to bench bleed it again. I first gravity bled the lines, but that didn't seem to help much. I decided to put in a call to McLeod to see what kind of advice they could offer. Their tech told me to read the instructions on their website. I reminded him that their instructions only explained how to bench bleed their hydraulic TOB. I also explained that I watched their installation video online and went through the bench bleed process but still had engagement issues. He told me that I also need to pump the master cylinder in addition to the slave cylinder. It would have been nice if their video explained that. I hung up with their extra grumpy tech department and proceeded to pump the slave cylinder about 100 times and then pump the master another 100 times. After all that pumping, I got all the air out. I was able to confirm that I had instant engagement of the slave cylinder as soon as I started pulling on the master.
I got the hydraulic bits back in the car and hooked up up the clutch fork. With the hydraulic clutch, there is no air gap between the TOB and the pressure plate fingers. You set it so the TOB just rests on the fingers. I started up the engine and pushed in the super light clutch and then attempted to put the transmission into first gear. It fell right into place.

. I let the car warm up and took it for a spin around the block. The clutch is amazing. The engagement is incredibly smooth and it catches in the perfect spot. No more on and off switch! My other half has a Focus ST, and the clutch in the Mustang actually closely resembles the pedal effort and engagement of the ST clutch. Not bad for a clutch that will handle 900hp. We'll see how it does holding the power on the dyno.
Once I hear back from Kris and get the tune dialed in a little better, I want to put a 100 miles or so on the engine before we do more dyno pulls with it. There is some smoke coming out of the breather at idle, but I guess I should expect a small amount. It's nothing like the amount that was previously coming out of it. I have it packed with steel wool as well as a headband wrapped around the filter to tame the smoke some.
I've been reading a lot about Alpha-N tuning for the idle. The Holley offers a combo mode where you can use Alpha-N for the idle and speed density for the rest of the fuel map. The Alpha-N just uses the TPS and lbs/hr fuel to tune at idle, and can be set to turn over to speed density at a specific TPS or RPM value. That may be the way for me to go due to my low vacuum at idle. I think the ECU is going to have a hard time at idle because of my cam. I'll see what Kris thinks, but it may be a viable option.
Oh, and my water pump is still leaking from the weep hole. I think it's a bad motor seal. That's what I get for trying to save money by purchasing a used pump. I have an e-mail to Meziere to see what they recommend.