I was under the impression that they used the 427 in the gt-500 for a while in 1967 before they switched to the 428. The book that I bought about all the options for the 1968 model year (my year) does list the 427 as an option. I have no idea if they made any though.
Last I heard (I'm no authority) "Ford" never built a 427 Mustang. Much as "Ford" never built a Shelby Mustang. However KarKraft or whatever the name is, was supposed to have taken delivery of 6-8 new cars and installed 427's in them. These cars were probably headed straight for drag racing duty and were never licensed, making them a lot harder to track down.
The search for these cars is ongoing and there is likely more current info out there.
If I remember right, they were all dealer installed option. I have seen 3 so far. There was a one of two cars built with a 427 for Shelbys race team that was featured on My Classic Car TV.Guy in Florida owns it along with a real Cobra. I dont know if they were factory installed for just this reason. The car was white with dual blue race stripes over the top with a unique 1/8th inch pin stripe to the outside of the two big ones.
My neighbor swears he has one,but since his house
was seized by the Feds because his daughter
was selling drugs,their still fighting over it.
I haven't actually seen it.
I believe him because he was an ex-Captain of our
No '68 427 W-codes ex-factory as Kevin Marti confirmed. However we have one 68 with a 427 and a W-code tag and stamping over here in Switzerland . It has yet to be documented with pics and sufficient paperwork. It had not a W-code from the factory, however, so somebody has altered it later.