The 351 block is very similar to the 302. That means that almost all parts swap between a 302 and a 351. This includes: Heads, cam, lifters, timing chain, timing chain cover, water pump, engine mounts, and all sorts of other stuff. The bellhousing bolt pattern is the same as a 302, so all trannies that bolt to a 302 will bolt to a 351. However, there are some differences in the 351 that necessitate new parts:

1) The oil pan is different. Motorsports carries one. You can also get an oil pan of of an early eighties LTD Crown Vic. If you go the junkyard route, remember you also need a oil pan pickup tube, and a special main bolt that the pickup attaches to. The FMS pan is a pretty good deal, and if you shop around, you can get one for under $100, which comes with the dipstick, bolt, and pickup tube.

2) The internal balance of a 351W is the same as pre-81 302's (28.2 oz). The 5.0 HO has a 50 oz. unbalance, which means you cannot use the flexplate/flywheel or the harmanic balancer off of an HO engine. You have to get the correct pieces from a dealer/junkyard.

3) The deck height is higher, which means you need a different intake, since the 351W intake is wider. A 5.0 Upper will bolt to a 351W lower.

4) Also, a higher deck height means that the accessory bracket will need to be replaced. FMS sells the new bracket for about $50.

5) The higher deck height means the headers sit up higher than in a 302 powered Mustang. A special set is required for a 351.

6) A 351W will in all likelyhood not clear the stock hood. You will need a cowl hood for your car.

7) The distributor has a fatter shaft. You can obtain one from a 351W powered FI truck (if you are using FI) or any late 70's/early 80's car using the 351W and a Duraspark system if you are going to build a non-efi car.

 

I don't think you'd have a problem with a 1" set back. The tight squeeze is with the EFI cars and all the wiring and A/C lines. If you look at any carb car, there's a ton of room from the back of the head to the firewall. There's so much room you could fit a ratchet with socket on the top 2 bellhousing bolts. Since the bellhousing will be the same from 302 to 351, you should be golden. If you do have to massage the firewall, it would just be to get to the top bellhousing bolts.

The tightest thing may be headers. On my carb car, the headers barely miss the firewall on the back primary tube. I can't see it going another inch without hitting. I'm sure companies have headers that will clear, or you could modify the firewall some.