OK, I just saw some new info on the net:
I guess in 1967 Shelby did build ONE GT-500 Super Snake with a Lightweight 427 Medium Riser and 2 X 4s. He was clocked driving it at 170 MPH. Although it ran great, it never went into production because it was too expensive. Likely, this is where the rumors came from.
I guess they did the next best thing the next year with the KR model. (Which had the 428 CJ heads instead of 390 heads like the other pathetic GT 500s).
For those who are interested, 428s were developed by Ford to provide more torque to tool their heavy T-Bird around. They are basically a stroked 406, and have 390 heads. Tasca Ford took the new motor (428) and wanted to make it into a performance motor, line the 427 Ford, so they tried to put a set of 427 Medium Riser heads on it (Ford had low, medium and high riser heads for the 427, the high risers were mostly for the track, and the medium risers were aggressive street heads). However, because the 428 has a smaller bore than the 427, the medium riser valves would not clear the cylinder.
So Tasca developed the 428 CJ head, which was basically Medium riser ports with Low Riser Valves and combustion chambers. Since my 427 was a Low Riser short block (had low riser pistons), I ran 428 CJ heads on it. Medium + High Riser heads have larger combustion chambers and work with a pop up piston.
Ford first put the 428 CJ in a very few 68 Mustangs at the end of the year, mostly with a drag pack option that included staggered rear shocks, and an engine oil cooler. Ford won the Winter NHRA nationals with that car that year. I briefly owned one with 4:30 posi.