I've owned several fox bodies (84 - 93 body style) and believe that they are real value and there are still some good one's out there even today. If you've got $8,000.00 to spend this is the way to do it, but your choices are limited for the money.
I'd recomend a 93 Cobra to anyone, but a good one goes for 14 grand (low miles, execellent condition).
Try to find a 91 - 93 LX (GT's look a little outdated and the body cladding doesn't age as well) with a 5.0 with around 80,000 miles on it. With regular maintenance, these go for 200,000 miles with little problems.
This will set you back about 5 grand. Look for a car belonging to someone older with minimal mods. There is no such thing as a Mustang that hasn't been raced.
95 - 98+ cars are more refined, but the 96 and new feature the modular engine which was a dog until 2001. Cobra's are nice, but out of your price range.
With the left over money, go straight for cam and matching intake, gears and exhaust. Don't waist money on pulleys, loud mufflers or ram air kits.
Did I help? Feel free to email me direct for more info. and good luck!