I have 2000 For Mustang V6 Convertible and for a long time I was not able to have it out in the rain due to a leak that I could not find the source of. Finally I tracked down the location and have come up with a fix that I have tested and can now confirm that it works.
Before I go on, I just read some recent posts in this section with the title "Mustang Convertible Leaks" and the members in there seem to have found the exact same leaks as I (based on the descriptions they gave) so I think this is a really common issue - I also agree with the assessment by gdoc89 that the holes are caused by wear - it looks to be a point at which the material folds when lowered. Also I wanted to give a big thanks to 'undecided.steve' who was good enough to write me a huge email about where he thought the issue in his vert was located - turns out my issue was different though.
Anyway - on with the description!
After rain or washing your car, the area behind the back seat has a puddle of water - ever hear a sloshing sound when driving around a corner? - Thats what is causing it. In very heavy rain dampness may also be found on the floor behind the front seats in the back seat foot wells and also in the trunk closest to the passenger compartment.
On either side of the back window, in the bottom corners, one or two wear holes will be present that allow the water to enter from the outside when it is present. The holes are difficult to locate (This is difficult to describe without pictures so have a look at the attached images as you are reading this) -
From the outside- Stand beside the car in front of one of the back wheels, facing the car. If you look at the rear glass you will notice there is a fold of material between you and the glass, slip your hand into it and slide your fingers down into the corner nearest you - feel around and you will find a small how about the size of a pea, possibly larger - that is the culprit. Look at the images below for a shot of where your hand should be.
This is where your hand should be:
This is where the hole is located if you were able to see it from the outside
From the inside- Climb into the back seat facing the back of the car, on one side of the well behind the back seat rest (where the top goes when it is down), pull the curtain/headliner that is attached to the rear corner of the interior of the inside to one side, feel along the fold of material in the interior of the canvas top and you should find the hole in this location. Look the following images for a shot of where the hole I found was.
Here I am pointing at the location of the hole
In the center of this image you can see some frayed material - that is a side view of the hole
A better picture of the hole
The good news is that there is a cheap and easy way to fix these holes. In the other thread that I mentioned, antiv6 suggested a patch product that looks like it would work really well - if I could go back I would probably just buy that and use it. I fixed it by using stuff in a tube called VLP (see pictures of it attached) - I got it in ACE hardware for around $5 I think - can't quite remember now. I used the VLP and strips of vinyl that I cut off an old computer bag to patch the holes on the inside and the outside (just to be sure). Sticking the patch on the outside was easy because the fold of the top naturally presses the patch into the shape of the top and holds it in place until it is dry. The inside was more difficult however and I used two small pieces of wood top hold the patch over the hole and the attached large spring clips to apply pressure on the pieces of wood. Make sure you dont move the top or expose it to rain for at least 24 hours to let the glue cure. If you don't have an old cavas bag that you can cut up for patches just try to get some flexible material that matches your top as closely as possible - also make sure to use plenty of the glue - I did not spare it.
The size of the patches I used, My hand is there for scale reference
This is the shape that the patch will have when inserted under the flap over the hole
I made the fix a couple of weeks ago and have washed the car and driven in rain to see if the fix worked and so far it works great - I even put up and down the top a load of times to make sure that the glue stretches with the top and does not separate - again - it is holding just fine.
Feel free to PM me for any details I may have left out or to clarify how to do the fix.
Hopefully this will help someone else fix their leaky top - enjoy!