Is a conversion to V8 possible from a 4 cylinder?
 

Is it possible to convert a I-4 to V8? What needs to be changed?

A lot...it's a big job and must be considered carefully unless you have some mechanical experience and a decent set of tools, not to mention an engine hoist and a garage for cold or rainy days.
The engine, transmission, computer & electronics, exhaust system, suspension, tires/wheels (and more) are all different on the 5.0 Mustangs from what your 2.3 came with.

The best way to do the swap is to buy a complete wrecked V-8 Mustang with engine and drivetrain intact for all the big and little pieces you'll need, including vacumm lines, wiring, emissions equipment and so on.
Buying these smaller parts one at a time gets very expensive and if you have to buy a complete new exhaust, suspension, wheels, tires and electronics you'll get discouraged.
Some parts, such as the cooling system, are the same on both the 4 cylinder and V-8 Mustangs, so you can save a little there.
Obviously,the V-8 fits right in but the devil is in the details, as usual.

MM&FF did a two-issue step-by-step article on this popular engine swap about two years ago so you may wish to check their website for possible reprints by mail or online.

www.musclemustangfastfords.com