Most definitely the C5 was available, but so was the C3. In fact, my brother has the C5 on his '85 T-bird.
There's two ways to tell which one you have. First is, how does it feel when it shifts? Does it feel like a slingshot on every change, or like normal cars? Second method: look at where the vacuum modulator is. If it's on the rear of the case, it's a C5. If it's on the side, it's a C3 or (God forbid) possibly an A4LD. Best way is to take the pan gasket to an auto parts store, and ask to see the trans filter kit paper catalog. There you'll find an entire section of gasket shapes, part numbers, and other good stuff.
If you are going to a V8, you need to ditch that C5 and get a C4. The C5 will NOT hold up. Their designs are similar, except for the C5's timing valve body and centrifugal locking torque converter, the source of that "slingshot" shift feel.
Just an FYI: Ford made lots of C-series trannies, i.e. C3, C4, C5, and C6. You could kinda call the early two-speed autos C1 and C2, but that's stretching it.
If you see an A4LD, RUN FOR THE HILLS!!!
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Capri306, Moderator, The Mustang Works Online
1979 Mercury Capri, 5.0L -- C4 -- 2.73
1987 Mustang LX Notch 
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