It sounds like a great project.
DOHC aluminum V-8, 6 speed manual, IRS Fox. Very cool!!
That said, if you are tight on cost, I agree that a nice built 4.10 geared live axle may be a good place to reduce the cost and complexity. Keep an eye out though, I know that occasionally guys are looking to replace/trade/sell their IRS from their Cobras to go drag racing with a live axle.
With some of the suspension systems available for the live axle Mustangs, you can hook pretty good without going to IRS.
Good luck and keep us posted!