Straight from the "reliable" pages of wikipedia:
"When Ford launched the third-generation
Fox body Mustang in 1979, the original engine lineup included the
Cologne V6. The same engine was also offered in the hugely successful Ford of Europe Capri Mk II. The 2.8 L V6 engine was a popular option for the US Mustang and the European Capri MkII and as a result the Cologne engine plant could not meet the demand for engines for both continents.
So, the Cologne 2.8 L V6 was dropped from the engine lineup in the middle of the 1979 production year and replaced with the 200cid Falcon inline six, which was now referred to as the 3.3L engine. The engine and front suspension K-member was transferred from the
Fairmont model which helped reduce costs instead of having to redesign the Mustang for a different engine."
Ford and one of their "better" ideas. It is a little harder to just swap a 302 into an I6 car as the K-member is totally different as I'm sure you know or now realize. Easy enough fix though, just get a hold of any 4-V6-V8 K-member and you're off to the races! Now, in their defense, the I6 is generally a very dependable powerplant. We have a 200 in our 67 and the 300 that was used in trucks is a stout engine. In a Fox Mustang, they are just so oddball that it doesn't make a lot of sense nowadays. Imagine building one with a turbo like madmike is attempting. The old 280Zs had an I6 turbo setup and they scooted right along! It would definitely be different and something you wouldn't see every day.