The 4.6L (281 ci) Cobra engine puts out about 320hp while the LS1 with 5.7L and (350 ci) puts out about the same amount (No, it doesn't put out 300hp at the rear wheels. More like 280 HP). A 351W with basic bolt-ons can easily make well over 400 normally aspirated HP at the crank. There would be fewer headaches and in the end would probably cost less. The engine would probably last much longer, too.
As far as durability, any car that is maintained as well as a police car is and is driven a lot of miles everyday will of course be able to put a lot of miles on the ticker before it goes south. I really doubt that there are 200k mile LS1s that were driven by backward-hat-wearing 18 year-olds who think they're playing Grand Tourismo on the highway. There are, however, a lot of 200k mile Mustangs that are beaten on by their owners and just keep running and running.
Like I said before, if it's a deal, get it and put it in a hot rod kit car or some other car that it will easily fit in, but if you want a fast Mustang, get a 351W or supercharger for a lot less money and more power for less money and headaches.
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