Get a t5 from a four banger. Faster and easier.   the gear rations in the v8 are really better. maybe not for the stock 4 pot though.  way to low 1st for the hotter 4 poppers with a hairdryer i find.   
anyways the input shaft diameter is different for the pilot bearing. i think you can get an adapter bushing that will allow the swap (don't quote me on that one) Plus you need a compatible bellhousing anyways.

the 8.8 will fit if you hack off the mounts and swap on a new set.  are you sure its an 8.8, usually found in 86 and newer. if the backing plate is flat across the top and bottom with 3 bolts in line its the small one and not worth the trouble. the pathetic engines of the early 80's didn't get very beefy drive lines. eitehr way the ratios won't be stunning.

as for the v8 change the pilot bearing when you do the clutch . i assume your gonna use the v8 t5. 

BTW if you are not set on the 85 parts 87 and up are the roller motors and have better heads. but if your gonna hop it up a block is a block :-)

http://www.britishv8.org/Articles/Borg-Warner-T5-ID-Tags.htm   here is a link to a site that breaks down gear ratios for just about any T5...u may have to copy and paste it.

okay say everything worked out (got the adapter, bell fit, all working order) what is the least amount of horses i would need for the v8 t5 to work smoothly given i use my stock rear diff?

I just gotta ask are you sure the trans in your cars a c4 and not a c3? http://www.fordpinto.com/general-pinto-talk/telling-transmissions-apart/msg100057/#msg100057
 
As for the V8 t5 it would be alot easier and cheaper to just grab one out of a 87-93 4 cylinder stang the gear ratios will be better for the 2.3 and cruising it. Atleast till you do get around to the v8swap then you can use the v8 one.