1979 mustang pace car speed mod or engine swap?
It sounds like you have a plugged up exhaust system. Those cars had a catalytic converter mounted before the turbo and another one just in front of the muffler. It's likely that the ceramic honeycomb in one of them has come apart and plugged either the turbo inlet or the muffler.
I have a 5.0, 4 speed pace car, they don't really have a very good resale value even though there were not very many of them made. The turbo 4 is fun to drive, but it was somewhat unreliable. I don't think a v8 would hurt the value of the car much. You could always save the old parts so it could be changed back.