What year is your Mustang? What options did it come with?
Our 73 Mustang Convertible has a 302 2v and C4 auto tranny. Those 302s are reliable engines, and can put out decent power with a few modifications for those who want more power. For us, I am leaving our 302 in its stock form as I know how reliable those engines are (former Ford tech from the 70s and 80s). So, unless you are desperate to get more performance from the engine I would suggest only a few things to change. Keep in mind, if your rear axle ration is fairly step (2.79:1 or even 3.0:1) any power building of the engine is going to be constrained unless you go to a lower ratios. In the case of changing the rear axle ratio, 3.25:1 or 3.5:1 are reasonable rations for street driving and even highway driving while providing decent performance at lower speeds. If you go too far (4.11:1 or lower) you will end up with an engine screaming at much higher RPM at 60MPH - no fun, and certainly not practical for street driving despite the responsiveness to acceleration.
If our 302 2v engine ever does cause me grief there are only a few things I would likely do. The valve guides would get bronze walled, the valve seats will be given hardened steel seats. The valves will be replaced with one piece units (not two piece units assembled together with friction welding that Ford did for some of their engines back in that era), the oem valve guide "seals" will get replaced with Perfect Circle "real" valve guide seals, the pistons would be forged aluminum alloy with 9.5:1 compression to help handle the low octane ethanol free fuel we have in our area (Rochester, NY, 89-90 octane ethanol free), the engine would be balanced, the timing gears will be dual roller without any plastic or nylon tips on the teeth, and I would likely get a nice breathing street/strip hydraulic roller cam (nothing too radical), lifter, and spring kit. I might succumb to the temptation to install a nice 500 CFM Holley 2v carb, or even kick it up a bit to a 600 CFM 4v. If I were to get a 4v carb I would get a nice Edelbrock dual plane intake manifold, taking care to not cause interference between the air filter housing and the hood, and of course the requisite set of Hooker long tube ceramic coated headers and high flow mufflers (and an X-Pipe). That would be enough to add a few ponies to the fun. But, unless I were to feel it necessary to replace the 2.79:1 rear axle gears with a lower ration (3.25 - 3.5:1) I would not put a lot into trying to increase the engine horsepower and torque level that much. And, finally, I might even "forget to install" the EGR valve (unless I got a 4v carb, in which case the EGR valve will definitely be forgotten).
A quick aside. On our 73 302 2v engine we do have an EGR valve, and it is connected and functioning properly. The car was literally barn stored for over 40 years, and has only 21,000 or so original miles - hence why the EGR Valve still works - not plugged. I had a slight hesitation on light acceleration and figured is could be an accelerator pump problem, retarded ignition timing, ruptured vacuum advance diaphragm, EGR Valve opening up too soon, or a low float level. I check the accelerator pump circuit, and it was fine. Same for ignition timing and the vacuum advance diaphragm and vacuum being sent to the diaphragm. I then unplugged the EGR Valve's ported vacuum signal hose. The hesitation was still there, so I reconnected the EGR valve. Long story short, I decided to rebuild the carb and found someone had rebuilt it previously. The evidence was they used both Power Valve gaskets in the carb kit (only one of them should have been used), and the float level was about 3/16 inch too low. I corrected the float level setting and replaced the Power Valve using only one of the gaskets. The engine now runs and performs wonderfully, even with the EGR Valve connected and functioning (I applied vacuum to the EGR diaphragm at idle until it began to stumble just to make sure the exhaust porting through it was not plugged up).
I opted to leave the EGR system functioning as it was not causing any obvious drivability issues, and because by adding a little inert exhaust gas into the combustion chamber lowers the combustion chamber temperature and helps prevent light acceleration pinging - especially when the vacuum advance diaphragm spring is set to a light level. If it had been causing any drivability problems it would have become "defective' very quickly. In many states for cars over 25 or 35 years emission control inspections are no longer required. But, it is still not legal to remove or disable original emission control systems - just sayin', in case anyone (else) gets to thinking about all that equipment. That said, the PVC and Fuel Evaporative Control systems are both beneficial to the engine and help minimize if not eliminate fuel vapor odors in a garage. Neither ought ever be disabled, and in fact should be kept operational.
Oh, options on our vert from the factory were minimal. Auto tranny, AM radio. Power disc brakes were part of the convertible package. Nothing else was added during its build. We added Classic Air A/C, installed a Dakota VHX analog instrument panel as the original panel was all idiot lights. I made some other enhancements here and there, but nothing wild. The car runs great as it is, and looks good as well.
