The visual check is a no-brainer. Just hope it turns up either nothing or complete destruction. That way there wont be any question.
Why, though, would insulation disintegrate on a car that has not had much use, when on others it would go for decades? I could understand if we were talking about something that was bathed in oil or something and needed ongoing replenishment of the oil. Did Ford use yard-sale wire or something?
Different subject: When I drove this car for about 15 minutes I shut it off and checked the oil (spotless looking oil, but 18 months old and 500 miles into that oilchange). The heat rising from the engine was substantial. I've read here that some people change the t'stat to a 180 degree version?