almost any modular stang part will bolt right onto the t-bird. You can talk him down to 5.5k I should think tho, unless it's REAL low mileage.
PI heads (what upped stang GT horsepower from 240 to 260) would be my first suggestion...relatively cheap, and a nice kick in the pants. I'm a ford v8 boy, and a huge modular fan, so I'm biased, but go for the bird. It'll be a fun car, you'll be able to make it as fast as any mustang, and it'll be different. SOrta the difference between an old school torino and a mustang.