A) the deciding factor on what will work with the heads are the pistons. you will just have to check P/V clearance (which you would have to check anyway) but without TW spec pistons you will be limited on cam selection (although if you are buying pistons just get TW spec pistons).
B)Yeah you can run a power rack if need be. otherwise you can just get a manual rack from an earlier mustang (around $120) and just put your power in as a core (they usually just check to see if it is a core). The thing about using a power as a manual is it takes more to steer it, be prepared for crappy steering response.
My question is why not just keep the power steering? It isn't that much of a loss of power and if you are gonna street drive it then it will be worth it.
C)These motors like nitrous just as much as any internal combustion engine that is properly set up for nitrous. Just as with a 302 heads, cam and all other aspects of the combination must be designed together to be efficient with nitrous. The motor is a little more stout due to the 1/2" headbolts.
D)A non roller cam will work as long as the firing order is the same (just have to get an EFI 351W distributor). Are you asking how much it is to retrofit the block for a roller cam?
E)Your rear end should hold up fine on the street and with moderate track use. The rear end in my 460 car has traklok and stock axles and has had a nitroused 302 and 357 running lots of sub 1.6 times and now with the 460 and though I know it is on borrowed time it is still going. (it will now explode the next time)
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"I'm in the 82nd Airborne and this is as far as the bastards are going!"
93 Cobra, R302 331,canfields,T-76,TKO......sold
87 Coupe, 466, Edelbrock heads,Vic jr,150 shot 10.41@129.5...sold
2006 Honda 450ER .....new toy
Do you own a Torch Red FRC and tremble every time you drive under I75 on Hwy 60 and look in your rearview mirror? If so you are suffering from what is known as Cobraphobia.