I'm going to jump back into the pool right quick...
I'd say go with the 351. You can stroke it out to a 393 or a 408.
The 351 based block will hold plenty more power than a 302 based block, and you'll get gobs of torque to go with it.
You can keep prices down by, lets face it, going with some imported parts. People like to shit on Eagle, but their forged stuff is fine. 4340 crank and rods will hold up to more than even a factory 351 block will do, and you won't be paying out the wazoo. Pistons, you've got a ton of choices. Mahle, JE, SRP, Ross, Arias, Wiseco, Speed Pro, Probe (though rumor has it he's closing up shop). Lots of choice. You can even get pre-balanced kits, and you can choose your piston type. Most companies give you a choice of cast vs. forged pistons. Go forged. Just in case you want to throw nitrous or something like that later on.
Cylinder heads. Again, quite a few choices. The big power guys like Twisted Wedge and AFR. Both are good, both are $$$. I'm looking into Edelbrock, which again, a damn good head for not a ton of money. That being said, I wouldn't take their pre-installed parts, I'm going to order bare heads and select my own valves, springs, etc. You usually end up having to change springs, no matter the head, when you choose the cam.
Cams: shitton of options. Comp, Crane, Isky, Crower, etc. Most people will tell you to go custom, and most of those people will probably tell you go talk to Ed Curtis at FlowTech
. He does lots of cams for lots of people in the Mustang community.
After that, it's the usual stuff. Machining can and will add up quickly. Align hone the mains with ARP studs. Deck plate hone with head studs. Cleaning. Surfacing the blocks. Lots and lots to do!