You can absolutely do a 7.5 LSD and it is not that bad. The rear end is stronger than you think it is, however, it will break behind a 5.0 if you abuse it hard enough and with enough power and traction. Remember: 79-86 5.0's came stock with 7.5 rear ends.
Here is the deal though. The early (up to about late 1984 including SVO) 7.5's had a cone-style posi unit. Basically, the two side gears are thick heavy cone-shaped gears. The cone of the gear is forced into a mating inverse cone that is built into the carrier and the friction causes them to "bind" enough to "lock". They will slip in a turn. A set of 4 springs put pressure on each cone forcing them into the carrier. The downside to this design is that the cones wear, the carrier wears, then the side gear/cone is allowed to ride further into the carrier because of wear, which makes the spider gears VERY loose. A small shock load, and they break, and there is no new replacements, you have to swap the entire carrier or do an 8.8. I broke several cone style 7.5's, and trust me, there is no affordable repair for them. When they're broken, junk it. If you find one that ain't broke, you can sell the parts for a little bit of money. They are hard to find.
The later style LSD (aka posi) is a "normal" style clutch type. Single "S" shaped spring (s-spring) in the middle that forces the two side gears into the clutches, which causes friction and there is your posi. Exactly like an 8.8, just smaller. These are MUCH stronger than the cone-style and much less likely to break the spiders and side gears. They are also much more common and parts are still available to fix them when they wear out. Now, with that said, the clutch kit for this style is not all that inexpensive. I bought one for mine and it was like $120 but it came with everything I needed including shims, so that I could adjust it tight. I have it as tight as I can get it and still be able to get the circlips and pin back in. I left the S-spring out, it is not needed if you have it shimmed tight enough. Plus is reduced binding in slow speed turns which is fine with me for a street car. When power is applied, the spider gears force the side gears outward, which loads the clutch pack. This works great.
It is not hard to swap in a 7.5 LSD, although they are getting harder to find. If you can find a bronco II or ranger 4x4, a lot of them had 7.5's and most 4x4 stuff is LSD. Be careful though because some Rangers could've had 8.8's. They look similar to the untrained eye so don't go pull a LSD carrier assembly from a junkyard not knowing the difference because an 8.8 carrier won't fit in a 7.5 housing, plus the ring gear won't fit. If you do decide to go ahead with it, grab a LSD carrier assembly from a 7.5, rebuild it, and stuff it in. You can usually use your gears with the original carrier bearing shims and be fine, but you always want to check it out real good. If you get everything set up right, it'll be plenty strong for a mild V8. Years back a lot of the stock or near stock Mustang heads up drag racers ran 7.5's because they're lighter among other things, but they had PLENTY of spare parts. Even the 300hp V6's were still running 7.5's in the 05-10 Mustangs. They get a bad reputation because people were trying to put 500+ hp through them on slicks and worse yet drag radials, side stepping the clutch from 7500 RPM. They don't live long in applications like that.
