Is this a good deal for buying a 'Stang?

[89 Cobra LX]

First, you definately need to get out of the current loan situation you're in. It's never good to be upside-down on a loan. If you make the deal for this GT, you will be paying the dealer an extra $3,000 on top of what he is asking for the car.

17,000 for a 97 Mustang is way too much to spend..... I know, I know it's a convertible. Big deal. From reading some of your other posts I know you're interested in more performance.
Convertible = heavy
4.6 = weak
The aftermarket support just isn't yet there for the 4.6s. So if you want to mod it, you won't have the selection or low prices that the 5.0 guys enjoy. Remember, the 96-98 4.6s are dogs from the factory.

If you buy this car, the loan will be for close to $20,000 for a 1997 Mustang GT. Not good when you consider a used Cobra can be purchased for this amount. Or for $23,000(?) you could purchase a new GT and have much better performance and a warranty.

If I were you, I would wait until I owed less than what the car is worth on your current loan. Otherwise, the dealership is really going to stick it to you (probably with no vasoline). Just my .02

Oh yeah, I agree with the others, $351 a month for a V-6 is horrible. I would think you could get into a new GT for close to that.