The best option is to buy a reconditioned E0 head from a 1980 Ford or Mercury 3.3 or 4.1 engine with 60 thou planed off it, new lifters, a new Victor Reinz head gasket. Use the later #9728 rod operated kickdown linkage found on any automatic 1973 to 1983 3.3/200 or 1973- 1980 4.1 / 250. Have an automatic non feedback Carter YFA from a 300, and a 1975-1980 YFA air cleaner body purchased. Ford part number D5DF-9600-A, found on some 75-79 F100's as well as Mavricks, Monarchs, Granada's..
Buy a used or new Fox Fairmont 1978-1983 3.3 throttle cable.
Task 1 is to lift the head and have the bores checked for taper and out of round (ovalarity). You can hire, rent, borrow or steal according to your creed.
Normally, as long as the ring pack isnt tampered with, and the rings and carbon deposits aren't messed with, a re gasket and better head will allow many years of additional service.
Task 2 is to then put in a proper modern carb, head and ignition system upgrade.
Most likely, its a C4 auto with factory 2.47 gears. They were common in the Grande Coupe. If its got AC, auto, and those gears, then you'll need better ignition, compression, carb to cope with modern conditions. It only had less than 100 real horsepower that year, the 155 or 145 gross horsepower rating was based on a high compression stripped down engine spec that Ford never ended up making due to strikes and inventory problems.The Mustang 250 and Windsor 351 2V were purposely downgraded with 9.469 to 9.500 inch deck block depths to drop compression before the standard gas Federal Emissions rules came out. Ford had a vested intrest in keeping the compression ratios well below the 8.7:1 figure reported in the press and to the EPA.
I'd personally convert ignition to electronic, as the existing Autolite can cope with a Pertronix Ignitor II trigger with very little cost.
The 250 block is
11 inches wider,
1.66 inches taller
with a cam 3/4 of an inch further out,
with a crank snout and crank flange 1/8 of an inch bigger,
and different bellhousing pattern,
different water pump bolts spacing,
Different harmonic balancer
Different ancillary drive
different engine mount stud arrangement.
Different center percussion engine mounts
Different block casting,
different frost plug positions
Different starter position and type
Different oil pump
Different sump
Different conrods
Different main bearing
Different thrust bearing
Different pushrod length.
Asside from those 21 things....the 250 uses the same head and pistons as the 200.
