mustang rear end (how much can it handle??)

Couple nit picky things. First off, there is no Ford 350, that is a GM size. Seconded, the classis mustang either have a 8" or 9" rear end. There is A LOT involved in covering an I6 over to a V8, but since you got a good price on your car you're already off to a good start. The stock 8" can handle up to 350rwph or so. This is provided that you have maxium traction, which you won't cause you're going to have an open differentail. If you're gonna build any kind of hot street motor, I would suggest finding a 9" and building it up.

six cylinder cars don't have either an 8" or a 9", they have a light duty rear end(7.25" I think) that can't handle V8 power. It must be swapped to a V8 unit. An 8" will suffice for a mild buildup, 300 hp or so with mainly street driving. A 9" would be preferred for engines over 300 hp or if you plan on taking it to the track fairly often. Or you could do like most people and break 3 or 4 8" rears and then upgrade to a 9". Be sure to upgrade the front spindles, steering, and brakes to V8 parts also, the six cylinder cars had dinky frontends, they really should be swapped for the beefed up V8 parts. There's alot more to it than just swapping in a '350'(blasphemy).

You will find that most folks that have any experience with classic mustangs will say DONT BOTHER to convert. For just a little bit more you can get a V8 car and have all the parts already there. Since you got a good price you can scratch that and go with what you have. Know that if you ever go to sell it that the car will be worth a little less than a car that is coded for a v8. There is a lot to the conversion...BUT its all bolt on...and a lot of its stuff that I have replaced on my car (an orginal V8 car) over the years. Springs, front and rear brakes, rearend, front spindles, and some other stuff in the front end. Of course I replaced my front springs with high rate drop springs, my front disk brakes with disks, my rearend with a 9", front sway bar with a larger one, added a rear sway bar, complete front end rebuild (upper/lower control arms,spring perches, rubber and other stuff).

So yeah, there is a lot to it, BUT since you got a car for free and a bunch of its stuff that most of us have done anyway you are not that far behind.

First thing to do is get with your local mustang club and someone that has a V8 of your year car that you can take a look at when you have some questions as to what is different.