I would consider a 5.0 out of a late model Explorer, Mustang or F-150. They are cheap, reliable and an easy upgrade. Most people are intimidated by the ideas of Fuel Injection and electronic engine controls, but many manufactures offer ECMs and Kits for your specific engine and transmission needs. Also of note, having worked several years as a Performance Specialist for a very Reputable Mustang builder I can tell you with certainty; in this market and growing for the last 10 years, unless you have an original numbers matching car the clean ones with modern engines and disk brakes pull substantially more money. Its worth doing it right.
If you want to keep the car original go with a 289 V8. Most mustangs from that year came with that size engine. Some came with 6 cylinders, some came with slightly larger engines. Many people have dropped in much larger engines in these cars, but to me thats kind of ruining a classic. If you are restoring a old car you want it to be close to original as possible.