Cowl rust is the bane of the early Mustang but its fairly easy to treat if not advanced too far. How do you find out?
a. look up under dash at the left cowl vent intake. If it is clean all around the air intake, then there is a 50% chance its okay. The right should be checked similarly but with the heater in the way, its even harder to inspect. Any evidence of water, white powder or corrosion in these areas indicates advanced cowl vent problems.
b. if it looks okay with under dash inspection and you still want more insurance of the condition, then take the car to an aircraft maintenance shop having a bore scope. A bore scope will let you see inside the grille, and after removing the fender splash guard, let you look at the outside edge of the cowl vents. This inspection will cost you $50 or so but then you'll know for sure.
If you know you have cowl vent rust, then there's two repairs worthy of consideration:
a. Top hat repair. Plastic top hat inserts can delay cowl vent corrosion for a long time if they are used correctly. Correctly means to remove the fenders, remove the air vent and heater assemblies, cut inspection holes in the upper cowl vent sheet metal (below the upper fender line) and clean all debris and treat the cowl vent are with POR-15. This is a pain in the tokus, and all work has to be through a 2"x8" hole but this is a lot easier than the repair to be discussed next. After the cowl vent is treated then the plastic top hat is inserted from the bottom with a liberal amount of body adhesive. The hole is then closed by welding or brazing. This repair will be good for a very long time provided the cowl vent is not too far gone...Expect this repair to cost between $500 and $600. This repair can be done without damage to existing paint.
b. Cowl vent plug repair. American Designer makes cowl vent plugs that are nice fabrications of the cowl vent area. To install these, the fenders and hood come off, the windshield and gasket come off and about 100 spot welds are drilled out to permit removal of the upper cowl vent sheet metal. Extreme care must be used at all times since the drilled sheet metal must be reused and the windshield lower edge must not be damaged. Once the cowl vents are exposed, the bad cowl vents are cut out and the surrounding sheet metal prepared for the cowl vent plugs. It is a very good idea not to disturb the left wiper post if at all possible, meaning cut around it even though the left cowl vent plug has the flat for the wiper post. The reason being, the best fit of the left cowl vent plug may displace the flat slightly and then leave inadequate flat space for mounting the wiper post. The wiper post position is critical since:
a. the upper cowl vent grille hole must match exactly
b. The height of the post is critical in order the chrome ring and special bolt fit when the assembly is welded.
The cowl vent plugs are fitted making sure not to increase the height of the overall sheet metal assembly. Note: if the height is incorrect, the wiper post fittings will not fit. The fenders will bend up such the moldings won't fit and the whole job will go sour. Note: it is almost impossible to correct the work so it must be done correctly the first time.
In leaving the left wiper post in position, then cutting the new cowl vent plug to match, much less effort is required. This is, of course, dependent on how far the corrosion has advanced toward the wiper post.
The right cowl vent plug is not as difficult since the wiper post is not near the vent hole.
Once the area is finished, it is coated with POR-15 or similar anti-corrosion treatment, primed, painted and then the top grille sheet metal is welded in place. If all goes well, the dimensions of the complete project match the original dimensions within very close tolerances. If dimensions are off, then other pieces having to be replaced must account for the error.
The bottom line for this job is it is very expensive and should only be attempted by body shops having a sheet metal artist and all the right tools. It is almost never done correctly by an amateur on the first attempt. It is almost never done correctly by a professional on the first attempt. If you want this done right, take it to an experienced, professional shop. Expect it to cost at least $1,200 (exterior unpainted, prime only). Full paint normally follows this repair.