Ok that's no biggie then, quick way is like HOSS said just epoxy it in there, it won't go anywhere.

Thanks for the links Oldkayaker, I didn't get home from work early enough to give them a call for that measurement. I measured mine and it is 1-1/4 like you said, I sure hope they can or will have the measurement available.

The links below show 60's Mustang fittings.  The stated thread size of 7/16"-20 and hose nipple size 5/16" are the same sizes as the Mustang II.  The Mustang II fitting measures ~1-1/4" from the bottom of the nut to the end of the threads.  Maybe call them and ask for a measurement.  The longer one looks to have similar proportions to the Mustang II fitting.  Good luck.
http://www.laurelmountainmustang.com/products?utf8=%E2%9C%93&taxon=&keywords=axle vent
http://www.npdlink.com/store/catalog/Mustang_Rear_Axle-429-2.html

ok... so here's a recap

the 8" rear from a 1975/76 rear was a perfect swap into the 79 Bobcat

all hardware from the 6.75 rear swapped over to the 8"
* Drums, Shoes, Springs, ujoint, etc... everything
* Emergency Brake Cable fit and works

for the breather I removed the thick washer and that gave me just enough threads to feel comfortable to reuse the one I had. The links others provided for the Mustang replacement part should have worked but I did call for a measurement from the bottom of nut to bottom of threads and the replacement part was 1/4 inch shorter but I believe it would have worked. Quite a few Mustang II people also confirmed that is the part they used when needed