I have a 80 Mustang I6 and a 81 Mustang T-top coupe w/ I6.
It does require a I6 K-member. The motor mounts are way forward and the K-Member is a bit deeper.
The I6 was offered in 79 1/2 to 82 Mustang's. There are 4 speed I6 cars but most are C4 auto's and the last group, IIRC 82's also had C3 auto's.
The Cologne 2.8L V6 was ued in the Capri II which were selling so well that engine supplies of the V6 dried up for the US so Ford USA had to improvise and use the 3.3L 200cid I6.
The I6 can be made to make pretty decent power and has a nice following. Its main advantage is lots of low end torque. Stock rating is about 95hp, 67rwhp. About same power as a stock 2.3L but with gobs more low end torque.
Common mod is headers and big exhaust, cam, and pull head and mill .060" to raise compression, bigger carb than the wimpy 1bbl.
The log head is the biggest performance inhibitor. Think of it as the I6 version of the 2.3L 's poor port design. Like the 2.3L it needs ported and polished to make good power unless you decide to go turbo.
Australia and Brazil also used a similar I6 design til the early 80's. Australian I6 heads have a removable intake whcih some have modified to hold a 4bbl. A stock non ported Aussie I6 head is a 50hp bolt on. Porting and polish adds more.
There is a aluminum Brazilian head available but it will need a custom exhaust header since the exahust ports are different. FSPP is getting ready to offer a bolt on Aluminum head for the US I6 that is designed to be a 100hp bolt on out of the box and with engine mods is designed to give 300hp normally aspirated.
You tell me if this 66 Mustang, 200 I6 is having problems making power? That is Mustang Geezers car and it is one of the hottest I6 Mustangs around.
Here is a forum dedicated to I6 Mustangs
http://fordsix.com/forum/
Here is Mustang Geezers website
http://www.geocities.com/mustang_man_1966/index.html
And Here is Ford Six Performance Parts.
http://cquesttechnologies.com/fspp/
2.3L turbo has the advantage in having forged pistoms readily available. Forged pistons for the I6 have to be ordered.