firing problems and rearend ?'s

If any one can solve my problem I'll greatly appreciate it.  First I'll tell you about my car.  It's a 1988 ford mustang coupe with a fuel injected 5.0 HO.  I've had the car for almost a year now and lately it's not been running very well.  When I bought the car it had been sitting for about eight months because the owners had the 5.0 together with the 5 speed transmission that came stock with the original four cylinder motor.  After purchasing the car and finally getting it started, the clutch safety cable doesnt work and I didn't have a transmission at the time, the car smoked black real bad for a long time and my uncle believes its a cracked sill on a valve guide since it sat so long.  After getting a transmission in and driving the car it no longer smokes except for when i push it and from what friends have told me I believe that it only blows black smoke when im shifting at high rpm.  It also burns oil pretty good and my oil is always black even after I change it.  I have no idea what modifications the motor has because the previous owners had no information on it whatsoever.  My unlce believes it has a larger cam but i have no idea, im only 17 and dont know the more advanced things of engines.  Well my main question is a little more complicated and ill explain the best i can.  My car started acting up about two months ago and no one knows whats wrong with it.  Its especially bad when it rains.  All my uncle and I can figure is that it's the distributor or the coil wire.  The coil wire that was on it when we bought it was bad and literally just sat on the starter solenoid.  I went to all the auto parts stores and all the coil wires they had for and 88 mustang were to short, the problem is i dont know what year the motor is and i would really like to find out so if theres a way let me know, I know theres probably a serial number on the block somewhere but i have no idea where and my enging bay in pretty cramped so i cant get inside to look for it.  My uncle has the engine out of his '85 GT and hes not using it so he switched me distributor caps because we thought mine might have a hairline crack and was letting moisture in and causeing bad sparks.  The new cap didnt help at all and now I can wiggle it even when its locked down.  We then took a spark plug wire and i am now using it as a coil wire and it seems to be working a lot better than the old one.  The motor sounds more like its overloading on fuel than anything and when i drive or let it idle i can smell it burning gas realy bad.  My mpg has gone down lately to.  I checked the spark plugs and all the tips were somewhat white and i was told thats good.  If not let me know.  We have a diagnostics machine at school and a friend of mine hooked my car up to it and a long list of problems came out.  Most had to do with the ignition system but i lost the paper so i cant fill you in on any of it.  I do remember it saying that i was having some problems with compression in cylinders 6 and 2.   If theres anyway i can fix this let me know also. Uhh, I believe thats about it for those two problems.  Another thing im a little worried about is my rearend. I believe its the stock 8.8 rearend and the car has about 207,000 miles on it right now.  The problem is sometimes when im on the highway I'll let off the gas and coast and then when I get back on the pedal the motor seems to hesitate and then when it does kick in I feel like the rearend is walking up towards the front of the car and I dont know but I thought that it might be because I dont have the quad shocks on the rear.  im getting ready to buy a 1962 ford fairlane and it comes with a 8.8 rearend, a carburated 302, and a 5-speed out of a mustang and 9'', 4-speed, and 289 out of the fairlane and im planning on putting the nine in my mustang .  I was just wondering if it will just bolt right in underneath my car without any modifications and of course I have springs in the back of the car so will i have any problems anywhere with that because im sure the fairlane has leaf springs and I know my car has a solid axle but I just want to make sure that i wont run into any walls during the install.  Also will the 8.8 go into the fairlane because I'm planning on rebuilding it and selling it.  If any of the problems with the motor or rearend sound major let me know what i can do to at least keep it from going out on me until i can put the carburated 302 in it.  Sorry i had so many questions but like i said I'm only 17 and I'm still trying to learn the finer points of car mechanics.  If anyone out their can help me with even one of these many questions I have I would very much appreciate it and I look forward to your answers.  If you have any questions about anything all you have to do is e-mail me and I will do my best to answer them.  Thanks a lot for your time.