It certainly wasn't uncommon for the 8.8 to crack tubes, bend the housing or start leaking at the plug welds in OBS truck applications. Sometimes they'd start weeping oil at the shock mount welds- another common area for the tube to crack. Also the limited grip CrapLok carrier would sometimes just crack because it had less meat to accommodate the clutches. As a result the open carrier was stronger and more reliable.When I lived in Tampa, FL. my 97 F-150's differential (open 8.8-3:55 gears) was just a singing after 40 mph. I took it to a GEAR SHOP ONLY to have it rebuilt (990.00 OTD).
Long story short, after having to rebuild it (3) times they checked the housing. It was out of round (warped) just enough to make the gears sing the blues.
They installed a rebuilt differential, from axle bearing to axle bearing, and didn't charge me anything extra.
Take it to a gear shop ONLY!
Now I have ZERO idea how they hold up in Mustang applications as I'm not a car guy. Furthermore the 8.8 in my '07 F150 4wd 4.6 is still ticking along with 225k miles, but I'm guessing Ford beefed up the housings or tubes a little either for the bubble bodies in '97 or the 11th Gen in '04......maybe not....I haven't researched it enough to know
Ford didn't have enough confidence in the 8.8 to put it behind 5.4 trucks -- even gutless 2Vs -- so maybe that says something