I'm not getting much feedback here, but I'll move ahead with the next installment.
While we were welding in all new metal around the trunk, we obviously had to drop the leaf springs. These were a huge pain, as documented elsewhere on the web. Ultimately, to get the front bolts out, I discovered the simplest way is to cut the leaf spring as close as possible to the bolt, using a grinder with a cut off wheel. I have a 4 1/2" inch grinder. Once the leaf spring is cut, I was able to fit my grinder with a 7" cut off wheel, in between the spring and the bracket and cut the bolt through without injuring the permanent parts of the car.
Trying to turn bolts with an impact wrench, pound them out, cut off the heads, use a sawzall, etc. is useless. After I went to the 7" cut off wheel, it took 5 minutes per side. So, if you are replacing the springs, just cut them off.
Once we cut them off we mounted new 4 leaf standard-eye hi performance springs I got off Craigslist for $75.
We picked up a 9" small-bearing rear from a 57 ford for $200. Ultimately used nothing but the housing as the brakes and axles were really junk, and the diff was 3:10 open.
It is the same width as a 66 mustang, and the spring perches are the same. Since it is the same width, we used the 28-spline axles from the 66 (I didn't like the looks of the axles/hubs on the 57) and took the axles and housing up to Glazier-Nolan Mustang Barn to have new bearings and seals installed. They were a HUGE help since we had to do some research to figure out exactly what seals to put in. The bearings were standard small-bearing bearings.
We picked up a 3:70 Trac-lok rear at Carlisle and mounted it in the housing.
We bought a rear disc conversion ($300) from EBAY that included rear calipers (from an 85 Cadillac with e-brake), rotors (from a 79 trans-am), cables, mounting hardware and custom brackets. It was for a small-bearing ford axle and it was a simple bolt-on. Here's the bracket mounted:
Here's how the disc looks inside the wheel (note these are 2004 Bullit rims, so there is a 1" adapter/spacer required to make the wheels fit. 17" wheels have no problem clearing the 11" rotors and calipers.
Here's our new rear (coated with POR15) mounted. Had to use new u-bolts and the spring pads from the 57 ford to fit the bigger axle-housing diameter. :
This is the first time in about 5 months the car was back on the ground, since we originally put it up on stands and cut the rear leafs off so we could cut out the rear framerails. I'm not quite sure what my son was trying to accomplish here: