Need Some Advice!

Fix the clutch problem BEFORE you do anything with the transmission. Your problem symptoms are those of a clutch that does not disengage completely.

Clutch adjustment
Do the clutch adjustment first before considering any other problems. With the stock plastic quadrant and cable, pull up on the clutch pedal until it comes upward toward you. It will make a ratcheting sound as the self adjuster works. To release to tension of the stock quadrant, use a screwdriver to lift the ratchet paw up and out of engagement with the quadrant teeth.

A binding clutch cable will make the clutch very stiff. If the cable is misrouted or has gotten too close to the exhaust, it will definitely bind. The binding common to adjustable cables is often due to misplacement of the adjusting nuts on the fork end of the cable. This will also cause the cable to wear and fray. Both nuts should be on the back side of the fork so that the domed nut faces the fork and the other nut serves as jam or locknut to the domed nut.

Clutch pedal adjustment with aftermarket quadrant and cable: I like to have the clutch completely disengaged and still have about 1.5” travel left before the pedal hits the floor. This means that I have only about 1” of free play at the top before the pedal starts to disengage the clutch. Keep in mind that these figures are all approximate. When properly adjusted, there will not be any slack in the clutch cable. You will have 4-15 lbs preload on the clutch cable.
Loosening the cable adjustment nut (throwout bearing arm moves to the rear of the car) moves the disengagement point towards the floor.
Tightening the cable adjustment nut (throwout bearing arm moves to the front of the car) moves the disengagement point towards the top of the pedal.
The quadrant needs to be replaced if you use any type of aftermarket cable or adjuster. My preference is a Ford Racing quadrant, adjustable cable and Steeda firewall adjuster. The adjustable Ford Racing cable is just as good as the stock OEM cable. It allows a greater range of adjustment than a stock cable with a aftermarket quadrant and firewall adjuster. Combined with the Steeda adjuster, it lets you set the initial cable preload and then fine tune the clutch engagement point to your liking without getting under the car.

Using a stock OEM cable, firewall adjuster and a single hook quadrant may result in not having any free pedal travel before the clutch starts to disengage. I found this out the hard way.
See Summit Racing - High Performance Car and Truck Parts l 800-230-3030 for the following parts.
Ford Racing M-7553-B302 - Ford Racing V-8 Mustang Adjustable Clutch Linkage Kits - Overview - SummitRacing.com Cable and quadrant assembly $90
The Ford Racing Adjustable cable is available as a separate part:
Clutch Cable, Adjustable, Ford, Mercury, 5.0L, Kit

[url=http://www.summitracing.com/parts/SDA-555-7021/]Steeda Autosports 555-7021 - Steeda Autosports Firewall Cable Adjusters - Overview - SummitRacing.com Steeda firewall adjuster. $40

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Or a faulty clutch cable. If you have probs in every gear I doubt its your trans.

Nvm jrichker beat me to it.