You have a different gear ratio in the rear end, you have to match the speedometer gear to the rear end/tire combo.
Speedometer Gear Calculator
As far as the OD flashing, after the day I had, I have to ask this question: does the tranny have an overdrive.
Usually a flashing OD light indicates transmission problems. Check level and make sure all wiring got connected correctly. Did you see the tranny run in the 'Stang?