I'm in the later stages of my C4 to T5 swap in my '68 myself. I'd recommend trying to get a '90 or later T5 as they have the higher torque rating.
I believe you can use '94 and later T5's that are in the V6 Mustangs too, although the input shaft is too long. I believe they are rated at 265 ft/lbs like the '85-'89 V8 T5s. I don't think it would be too difficult to swap out the input shaft either(regardless of what the Ford Muscle website says). You would have to get another bellhousing if you used later V6 T5 though.
I bought a wore out T5 from an '86 GT that I rebuilt, and I thought that installing and shimming the input shaft was fairly simple compared to some of the other stuff!
I spent as much rebuilding it myself(maybe more) than I would have if I had someone else do it though. You'll need access to a press if you decide to rebuild it yourself, and I'd recommend the rebuild video from Bob Hanlon too.
I went with a Lakewood T5 bellhousing(so that I could use a cable clutch although a factory T5 bellhousing will of course work here too) and I had to grind off I'd say about a 1/4" off the mounting flange of the bellhousing on the driver's side so that the bellhousing would clear my hedman headers. The T5 bellhousing also pinches the air conditioner drain hose in the transmission tunnel too.
The lakewood toploader bellhousing is shorter, so it probably wouldn't hit the A/C drain hose(if you have air conditioning); but you'd have to modify the bellhousing to use a cable clutch, and probably grind the flange somewhere as well.
The Lakewood to engine block bolts are 7/16-14 coarse thread, and 1 1/4" long in case you do choose to get a Lakewood from ebay or something like that and someone has lost/kept the bolts. They also have 7/16" small outside diameter washers on the bolts about the same size as lock washers would be.
I also used those same bolts and washers to bolt the T5 up to the bellhousing.
I'd recommend getting an aftermarket 28 oz. flywheel drilled for the late model 10 1/2" clutch. I'm using a early flywheel, and the 10 1/2" clutch will not fit unless I had it redrilled which I don't want to chance. I did try a late model 351 flywheel and while it is still 28 oz., it wasn't drilled for the 10 1/2" clutch either! It also weighed 30 lbs where the early flywheel only weighed 20 lbs so I decided to stick with the early flywheel that I already had.
I bought a 10" diaphragm clutch set for an '85 GT as I knew this would have a roller pilot bearing, and the proper throw out bearing for my T5 clutch fork. The only problem is that this pressure plate will not allow me to use the original flywheels dowel pins that I bought! I'm tired of going back to the parts store so I'm gonna use this clutch kit anyway!
Oh, I didn't have to trim my shifter opening for the T5 shifter either. I barely have enough room. I did have to lower the transmission to install the shifter though. I also don't think that I'll have to shorten the driveshaft.
There appears to be about an inch between the base of the slip yoke and the tailshaft housing. Also, I did not notice any binding when I lowered the rear of the transmission to install the shifter. YMMV
I've started hooking up the clutch cable kit, and I'm hoping that the headers aren't going to be too difficult. I can already see that a header tube is in the way, but hopefully I'll be able to work around it. We shall see.
