If I were you, id use h-bead rods becuaes stock 351 rods wont be up to the task. Another intersting idea would be to contact speed-o-motive and get one of their long rod kits for the 351w. It uses the 400m length rods measuring 6.58 inches instead of stock 5.958. They say you can run 11:1 with 89 octane and aluminum heads with these rods. That should help a lot with hp and torque.
I would definately use AFR 185s, all ive heard is good reviews from the magazines about them. Also, use 1.6 roller rockers and 7/16 studs.......i broke a 3/8 stud in my 302 just from street abuse.
I agree with the performer rpm airgap and 750 carb. Im not sure if itll fit under the hood of a 66 mustang though, acutally..probably not, i have performer rpm and 600cfm edie carb with a 3 inch filter in mine and its about 1/2 inch from the hood. Check out speed demon carbs too, my brother got one for his 408 and theyre well worth the money.
Id use an MSD6AL so you dont overrev it. ALso, get a distributor with vaccum advance, itll give you better gas mileage without taking away performance. (if you dont know the difference between the two, the vaccum advance advances the timing when you cruise, so instead of giving it gas too keep going, the rpms stay up from the advanced timing)
THe stock crank should be fine....it has 3 inch mains afterall.
If your looking at fuel injection, edelbrocks work good i've heard....plus they look coooool. Anybody seen the one they put on the bronco in monster garage???
An AOD would definately help out, as would a 5 speed. 3.50s sound good for street use, but you could go up to 4.11s with overdrive without being killer on gas mileage. Heres some links for the swaps into old mustangs. t-5 AOD
Also...on another note, just for fun on desktop dyno i built a 351 for the engine building contest for hotrod magazine. I used edelbrocks flow numbers for their 2.02/1.60 heads, a dual plane manifold, 750 carb, 10.5:1 compression, compcams# 35-452-8 (230/230 @.050, .544/.544) hyd roller cam and this is what it gave me....448hp @6000rpm, and 443ft-lbs @ 4500rpm. This is without taking the long rods into consideration becuase desktop dyno wont allow you to. I think your combo should get your goal numbers.
so...there's my 2 cents