The AOD swap can be done, but it brings up all sorts of difficulties in a II.
Gotta use an older AOD (mid 80s or earlier) that wasn't computer controlled, have to either find and buy or fabricate a way for the kickdown to mount to your carburetor, have to have the kickdown adjusted by a
tranny shop (AODs are EXTREMELY fluid-pressure sensitive, having that cable the slightest bit out of adjustment will grenade that
tranny in minutes, we're talking less than 1/4 of and inch.) you'll have to fabricate a
tranny crossmember to fit it in there, and the driveshaft will have to be shortened.
If that's the road you really want to go, then by all means go for it, but by the time you buy all stuff for the modifications to make that AOD fit you could buy the II-specific bellhousing and torque converter, and track down and rebuild a C4 to go in there.
My car is keeping its C4 until it gives up... then I'll either rebuild it, swap in a T5, or throw a GM Powerglide with an aftermarket bellhousing.
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1976 Ford Mustang II Ghia: 302 with a 600cfm Edelbrock carb, Edelbrock Performer 289 intake, Dynomax Blackjack headers, 2.5" exhaust with Flowmaster Super 44s. RJS 11-gallon fuel cell, C4
tranny, chrome 16" pony wheels, fuzzy dice, brown vinyl half-top, and painted in the tackiest color ever (harvest gold, that's why I call it "The Goldenrod").
Also have a 2003 Dodge Ram (lightly modded daily driver/tow rig/office/dining room/home away from home/workshop... I call it "The Big Blue Dawg".)