Nice motor combo, with converter and gears. My 331 AOD'ed 86 ran 12.80's with a motor set-up for boost. And the tranny combo is an Art Carr AOD & converter(3400) with 3.55's.. Check out my page in my sig I have some times before the blower..
really, it's not too difficult. concentrate on traction and gears first.
my buddy is doing 13.7's in a bone stock longblock with 240k original miles, original intake, 89 vert. he's got:
-drag radials
-aftermarket rear control arms
-air bag in spring to control wheel hop
-removed front sway bar for racing
-cold air intake
-3.55 gears
-timing, etc etc.
Basically, I would suggest getting the above, which shouldn't cost you too much, especially if you go with a turbo coupe rear end. If you're on a budget, a $600 nitrous setup will get you well into the 12's after that, or a simple supercharger. It really doesn't take that much work or money.
the t5 will take the abuse for a while just fine, just NO POWERSHIFTING!!
My race car is a 57 chevy (I know chevy...) but it probably weighs in about even with a fox. Its around 3100 lbs or so with me in it. Its pretty much gutted except for the racing seats. It has a 383 in it making around 450 hp. It has a turbo 400 auto.
With the lousy Mickey T tires I have now and a decent launch, I can barely crak a 12.90. You need serious power and grip to get into the 12 second zone. Boost or Nitro would help a whole lot...
a 57 chevy is just about as bad ass as it gets, and you have a truly amazing car.
However
the old cars and engines are not nearly as efficient as the fox's and newer cars are. It's much easier to get a fox into the 12's. Like I mentioned go with the nitrous, gears, and control arms,drag slicks or do a head/cam/intake/gears/drag slicks.
my buddy like I mentioned is doing 13.7s with a bone stock longblock, and that's only 8 tenths off. He just upgraded to a ported lower, and a 70 mm throttle body, and early indications are that he may have shaved of close to two tenths more.
unfortunetly you have to do a lot more with the older cars to get them to run as hard. I'm not trying to insult,...i'm rooted in old school cars. we have a 66 valiant vert, a 72 302 maverick, a 64 dart, etc etc.
the important thing to remember is that too many people get carried away with big horsepower mods, and never address the traction and suspension issues. My buddy tony has put most of his efforts on applying the power that he does have to the ground, with no power adders, aftermarket intakes etc etc he's gotten mid 13's. From there, your just a set of heads, a cam, and an intake away from 12's