OK, I know the T18 is an easier swap (maybe), but you can't beat the 7:1 1st gear. Plus, I know a guy who has one for sale.
So how hard is it to mate to the 258? Are there adapters available or will the stock bellhousing work (with modifications)?
I don't know about mods to the OE BH to mate with a SM-420, sorry. I kinda remember reading about someone who modified a GM 2.8L BH to adapt a SM-420 to an AMC 2.5L... yes, different but maybe some help is there.
I do know a guy who might be interested in buying your BH if you want to sell it.
Advance Adapters and Novak both make adaptors to fit a SM-420 between your 258 and D300 (full BH and tc adaptor). IIRC - cost is about $400 for each adaptor and OA length will be close to what you have now. AA has buyer's guide and instruction manual available that provide tons-o-information about swaps and what fits where.
Doesn't a Ford NP435 match to your BH? True, not as low first gear and the guy down the road doesn't have one for sale... but that is still one less adaptor to buy.
I hope nobody minds me throwing an additional question into the post here but it is on the same subject, I have a T-176 and was wondering if the NP- 435 was the same lenght as the T-176? And if an adapter would be needed to make it bolt up to my dana 300?