mustang fuel problems

Are you sure it's gas? I sounds more like coolant, like you have a blown head gasket or a cracked block. How does the engine run? Smoothly?
Does the liquid smell sweet like coolant, or is it definitely gas?

If it's definitely gas, my only idea would be that you've got a cold cylinder, maybe caused by an injector that's stuck open. The engine would be running like crap, though.

White exaust smoke could be steam.
"It doesn't have water in the oil." You can have a blown head gasket and never get water in the oil.
"if you let it run for about five minutes it will wet the grass with gas out the tailpipe"
If that wetnes was gas it would be running extrememly rich and your gas mileage would be very bad, like ten miles to the gallon anbd the engine would be running real rough. A good mechanic can look at the plugs and tell if they have been subjected to coolant so if you still have the old ones take them to a good mechanic for a look see. Find a radiator repair shop and they usuallu have a head gasket checker, takes about fifteen minutes.

Open the radiator cap with it cold and fill the radiator filler hole all the way to the top. Crank it and keep a hose trickiling in the filler hole to keep it full while you watch the filler hole for bubbles and if you get regular bubbles the head gasket is blown. 94 & 95 had a problem with blowing head gaskets but they now have a metal type gasket that solves the problem. You got'ta pull the heads and be darn sure you use a torque wrench and torque them to the exact specs, and be sure to use the right head bolt torque pattern. OC

I'm with the majority. I'm thinking a blown head gasket. Good luck with your problem.

I had the same prob with my 94.... Was my computer. Computer was sending a constant signal to one of the injectors causing it to dump fuel into one of the cylinders. At idle car would blow white smoke and run like shyt. and would go through a tank of gas in no time. Replaced the computer and no more probs. Is your check engine light on?? if so have the code read....mine was on and read a misfire on the cylinder that was getting fuel dumped in....

It could also be an O2 sensor but teh CEL should be tripped with that as well.