Can gears hurt?

[Mr 5 0]

Use the 3.73 gearset. It's only a slightly higher RPM difference from the 3.55's and with your AOD you need all the torque multiplication you can get.

The 3.73's will add around 400 RPM at highway speeds which is negligible and probably will make a 1 or 2 mpg difference in your gas use.

In my opinion, the words 'gas mileage' and 'Mustang' should not be used on the same line.

Better performance and good gas mileage are not compatible goals. If gas mileage is that important to you you've bought the wrong car. A Mustang V-8 gets somewhere in the low 20's for mpg on highway driving, maybe 18 or so overall, which isn't bad. You're feeding eight cylinders and pulling over 3,000 pounds. Be reasonable when it comes to gas mileage expectations and you won't be disappointed.

On other thing: Find a different mechanic.