E7's are a popular swap and greatly improve performance on an '86 shortblock. P/V clearance might be close but you should always measure with any headswap. FYI the iron E7's came on 87-95 Mustang 5.0's as well as Broncos/F-150's(forget which years) and can be found at pretty much any boneyard for cheap. I've heard GT-40s as well, and even Trickflow??? Not familiar with cam options but have heard people mention some type of cam from Crower. As far as intakes goes, you can pretty much get away with any, respectively(Cobra/Explorer, 87-93 upper, GT40, Edlebrock, T.F., etc..)