Well, as to how much an AOD can take, I've been told 400hp, but on a stocker, I just don't know. The best mod I did was install the B&M shift improver kit. They give you a towing/RV and then a high performance option in the kit. All it envolves is drilling a couple of holes in the separator plate, and the kit basically makes shifts harder and more crisp, not such a "slide" as the stock setup is.
You could go with a higher stall torque converter, say 2000-2400, and still retain the lockup feature. B&M's and PI's are the best, IMHO.
I'm running 3.73's right now, too. The mileage is still 22 or so, and it hauls off the line. My buddy with a stock geared '91 GT - manual trans - can't keep up with me.
Will it hold up to high twelves? Um, I'm going to find out this spring, I guess. High 12's require about 300 horse. The best thing you can do in the meantime is bump up your TV (throttle valve) pressure. This is done by moving the little plastic block that snaps into the throttle lever on the throttle body. Go to
Baumann Engineering to find out what I mean. This is THE best site for automatic transmission information and upgrades.
Just keep in mind that throttle valve cable is NOT a kickdown mechanism. It affects shift points AND shift firmness. The only inputs the AOD has are the TV cable and the governor on the tailshaft. Hope this helps, and good luck. I'll let you know if mine holds up! BTW, I'm doing a complete performance rebuild.
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Capri306, Moderator, The Mustang Works Online
1979 Mercury Capri, 5.0L -- C4 -- 2.73
1987 Mustang LX Notch 