John,
MikeH is correct that it is *NOT* the input shaft that gets shortened. However, my experience with a new steel bearing retainer (for whatever reason) was different - I did have to shorten the one I purchased.
Having just had to tear apart my conversion to cut down the steel bearing retainer (which bolts to the transmission case around the input shaft), I'd advise checking the length of the retainer before assembly.
I had purchased the following components for my 2.8 conversion with 2.8 bellhousing and T5 transmission:
Clutch Pack:
07-008 Clutch Kit: Ford Mustang, Mustang II, Mercury Capri - 9½"
Phoenix Friction Link:
http://bit.ly/US2D4w
V8 Bearing Retainer:
Ford Racing T-5 Bearing Retainers M-7050-B
Summit Link:
http://bit.ly/WoVwxu
On the bearing retainer - I only turned down the base of this to fit in the bellhousing but did *NOT* shorten it based on what was said on the forum.
However, after assembling the car - the clutch would not disengage and the engine was hard to turn over (and made a screeching sound when cranking).
As noted elsewhere on the forum I broke down the car again and saw that the bearing retainer was pressing on the clutch disc (metal filings on the retainer end and a ring on the clutch disk).
I shorted the tube to 4.5 in from the surface of the mounting flange to the end of the tube, which I had found someone else had mentioned on the forum.
This fixed the problem.
Picture of the part being shortened.
http://bit.ly/W2XN2o
Whether this is all works right is unknown until I get the engine started and test it out, but the clutch disengages now and the engine turns over freely.
-M