I have a 98 XLT 2WD that one day will get a 5.0 engine and all-wheel drive via an Explorer/Mountaineer drivetrain swap. Right now I have a 2.5 with 220,000+ miles on it and it needs a trans swap. Currently has a used up 4R44E automatic. Getting the M50R2 hoping I don't have to buy a different trans now, and that one later. Trying to save $$$$.
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An M50R1 will work on the 2.3/2.5 Lima engines, but not the M50R2. But it will bolt up to the 5.0 that will eventually find its way under my hood.
Sure it will fit, you may have to build your own crossmember, or swap one from a different year/model truck, but it will probably be a good deal better than a 700R4