Definitely go with Fordstrokers and do a 408, don't even mess around with a 302 based block. You'll save money with the OEM 351 block which can take well over your power levels and you'll be able to hit 500 without any sort of power adder with ease.
Talk to Woody about what you want to do and remember, you can have a 500+whp car but without the right suspension/chassis upgrades and a driveline to handle the power you have a very expensive paperweight.
2000 Mustang GT Steeda #0048
Just because I give you advice, doesn't mean I know more than you. Its just means I've done more stupid ****.