I've just had a look at the Mustang forums. One or two things talked about. The first is that the timing advances significantly after 3,000rpm, so make sure that the wiring is connected properly to the distributor. The second mention is the MAF sensor and although this may seem unlikely on a car with low mileage, they can go faulty. If you can temporarily disconnect the feed (look around the inlet tract and you should find it) and see if it will rev.
Finally there is a suggestion that disconnecting the battery negative (or take out the master fuse) for 15 minutes will reset the ECU.
All worth considering?
