I worked on a 65 K code convertible that was an original owner car, won in a radio contest, and in a garage fire in the late 80s. K value then was not as much as cost to restore, but sentimental value had the owners making up the difference out of pocket.
It looked like death warmed over, and my boss took it ononly  because he knew the people personally.
We were DREADING the day it rolled in, but once we disassembled it, it was like any other resto job.
We stripped it to a BARE shell, cut the quarters off, no doors, decklid, front clip,only a drivers seat, etc. My boss wanted to make sure it ran before we did the body, so I got to drive it around like that.
Got some looks, as I drove around town. Pretty peppy too, as light as it was.
I wouldn't be afraid if it was me.

not a mustang, but i turned this:



into this:

LondonSteve wrote:

Any reason to stay away from it?

It sounds like it will require hard work, time and money as always is the case. Time can to some extent compensate for money and the other way around, hard work will be involved either or. An understanding spouse is also good. When I had the garage fire that almost destroyed my ´67 it was actually my wife that convinced me to restore it again as I was about to give up on it when I got back home from the hospital (put out the fire myself and inhaled a lot of Mustang smoke) and checked it out.

LondonSteve wrote:

Anybody with experience?

Yes!

LondonSteve wrote:

Should I be worried about metal warping and not fittng?

If it ain't too bad it can be fixed and as the fastback bodies are reproduced no problems with getting parts if you have to replace something. Only place my coupe body was slightly warped is the panel between the rear window and the trunk. One thing you might wanna check up on early is if the front and rear window really fits.

LondonSteve wrote:

How about the fire smell?

Once gutted and cleaned all that smells from the fire will be gone and once you start gluing, painting, installing new parts etc. other smells will take over.

Here's BTW a ´40 Ford Coupe that was brought back to life from a major garage fire, much worse than what I started from: http://www.hotrodscustomstuff.com/latest-stuff/stroker-s-tom-medley-s-1940-rebuild-project.html
 

Thanks for all the positive feedback. Unfortunately the car is gone. It was two hours from my house and I replied to the ad last night within hours of it being posted. Played telephone tag all day long trying to go see it and make an offer. It was sold before I could even get there.

I am pretty dissappointed, as I think it would have been a perfect project for me. I already have all the glass and interior, so parts sourcing would have been a snap.

One can only hope for another opportunity like it to come up again some day. 

As the day wore on, I knew someone else was going to snap it up before I could.