My 66 had no engine. I installed a '78, 302 from a TBird but had to change the oil pan and pump to fit the 66. The dipstick tube is located on the drivers side near the master cylinder. The 66 oil pan has the sump in front. Is the existing dipstick going to read the oil amount in the pan with the sump area switched to the front?

 

I had a similar problem on another make of car and engine. Long story short, it has to go into the sump. The mustangs have a hole in the right forward timing cover to accomodate the dipstick tube going into the sump.