Yes it will work, I've done it myself for an M-body ('88 5th Avenue). Swapped from stock 7 1/4" rear end to 8 1/4" out of a Jeep XJ, drum brake assemblies transferred over just fine.
Great, exactly what I was hoping to hear. I couldn't believe that someone hadn't already done this before me. This is a really cheap way to get 3.55 gears and the extra axle width will be perfect for my 17" Mustang wheels.