Definitely way too high. TX car is a plus, shouldn't have rust. Notches tend to be worth more. But I wouldn't pay that much for a 5.0 either. I wouldn't pay that much if it was already 2.3T/T5/8.8 swapped. Nice little crunch in the front bumper too (not that mine hasn't seen much worse in its day). Maybe its just me, but I'd almost feel bad asking $2k for it were it me selling it. Hell, I paid $1000 for a clean TX '86 SVO and all it needed was a head. (I also stole that car at that price, but you get the point)
Now, a great car you could also get for a daily would be a thunderbird Turbocoupe. Reports of 28mpg+ are common, and they're quick cars for what they are. Poke around a little more and you can find a MUCH better deal. Just checked my CL and there are several sub-$2000 2.3s mustangs here. What's your reasoning behind looking at THAT car? You partial to the notch mustang or what?