If you are a good friend, you won't make your buddy pay for anything.
Because that was going to happen regardless, just be lucky it didn't happen to you while you where driving or at a stoplight.
Get the housing out of another mustang, should be pretty cheap, then build it up from scratch.
Eaton posi (if it's in your budget) 31 spline axles, new gears, and all new bearings.
If you are broke for the moment, just take the new rear you get from the junk car, and run it as is.
If you decide to build one up, pay to have it assembled by a professional, you don't want to invest a grand in the rear and have it eat itself because you got the tolerances wrong.