As far as the tranny goes, you can use a TKO or ther are swap kits to mount the r154 to other motors. r154 shares its pattern design with the jeep ax15, there are a few belhousings or adaptors for that, advance adaptors makes them. As far as the rest, as I said, it depends on your skill level. If you cant weld decent, then it isnt worth it, if you can, it cant be. Ill agree 100% that the ford 302 is total crap in stock form, but that can be easily changed. THere are turbo mustangs making 450ish whp range with only an intake, meter, injectors and a crude tune and stock blocked/internals cars making over 550 with better heads. The weakest point on the 302 is due to the mains being below the block, the blocks tend to split , the internals are fairly strong. This has been solved in the last couple of years. There have been stud girdles for years but none have really proven themselves. Now there are 2 products. A fairly inexpensive "halo" stud girdle that effectivly places the mains higher by bracing them properly. Another is a lifter valley brace thatcrosses the upper motor. A mustang recently did 1050 to the wheels with nothing internal but rods and pistons, combined with the girdles(no crank, dart block, etc).I own, both a mustang and an mk3, and have owned about 5 other mk3. I like the car and I dont feel the 7m is a bad motor, but I also feel that a v8 is a good project for someone with the ability. Do people flame people for putting a 7m in a mk2 or celica because of value? No. Who cares if it is from the same manufacturer. Take the car you like, take the motor you like, do a clean install, bake at 1600 for 11 seconds and enjoy. As far as a/c and PS, those are easier to get working than one may think.
There is a mk3 on sds's site that is a decent example of this. It isnt the best but it is a boosted sbc in a full functioning car. The numbers arent all THAT awesome, but the car is still running factory iron heads, stock crank and stock rods and cheap aftermarket pistons.