omg another 5.0 owner!
A 3800 can be had at a junkyard for rather cheap. Around me you can get any longblock from a chain called Crazy Ray'* for $150, that'* with no warranty. Would your friend be doing the labor or would a shop?
As far as value goes it really depends on where you live. When I sold my '97 for my 'stang I only got $2700 for it and it was in immaculate shape with 80k miles (the bonneville).
Personally, if I were attatched to the car, I'd have the engine replaced.
EDIT: No, it'* not much different than installing an RWD engine, you're just installing it sideways.
'92 Mustang GT - GT40P Heads - Trick Flow Stage 1 cam - GT40 Intake - BBK Unequal shorty headers - FRPP 3.73 gears - Mickey Thompson ET street drag radials - 13.89 @ 99.09 and spinning like hell off the line