I re-did my 96 mustangs 8.8
I went with 4.10 from ford performance. And I've heard that Yukons are good too. If you are going to replace the gears. Do a complete rebuild. There are numerous complete kits available. Bearings, seals, shims and even gear fluid with a separate bottle of friction modifier.if it comes with the cover gasket throw it away and just use a high quality RTV. When replacing rear end gears, you need to break them in according to the manufactures recommendation. Also I had a differential specialist shop do the work. $335 with a 1 year warranty. The stock 8.8 in our trucks should have no problem handling 300 hp. I've seen some guys use the 8.8 with just axle upgrades i.e. 31 or 35 spline. With motors putting out 800 hp. The 8.8 has plenty of gear and axle upgrades, and even brake options out there at reasonable prices. Not to hijack your thread, but I wonder if the Mustangs rear disk brake setup would work. I've seen the conversation kits that use GM parts.
I converted my stock GT rear brakes to 11.5 Cobra. All it required was the cobra mounting brackets. But I'm sure stock 15" rims won't work. When I did my cobra conversion I had to go up to 18" rims. Again sorry for the hijack,
Squirlye, 86 F-150 short bed, 300 I6, 4x4, 4 speed, HEI distributer with computer delete. And more to come.