If you can pick your rearend ratio the standard 4-speed car saginaw (direct 4th gear) works great with a 261 and needs no mods to bolt up. It is just as strong as a stock T-5 and easy to rebuild if you break it. There are a few ratios available, they are dirt cheap and plentiful, and fairly compact compared to a T-5. You can also put the shifter anywhere you want if you fabricate the shift rods and use a hurst shifter. I picked up a mint 3-groove (the input shaft is grooved to tell you the gear ratio) saginaw at a garage sale, of all places, for $50 recently.
I'm putting the Saggie and a 3.07 rearend into my '50 truck with a 261.
