Don't think it'll be a balance issue. All 289's should have the old 28oz imbalance, and to my knowledge, no 351/5.8's were ever changed to the 52oz of the H.O. 5.0's. That's what I remember anyway.
Not sure what will not work though. Unless Ford used a different bolt pattern so you couldn't use a 289 flywheel in a 351? Maybe as was metioned before, it was because the 351's needed more clutch? Or a tooth-count issue for the starter? Doesn't sound right, but you never know.
I'd never heard of a change in bolt patterns for the 351W to fit the C6 CrazyHorse. What you find are C6's with either the small (I-6/289/302/351W/C) or big (351M/400/460) pattern. Not the engines with a different pattern to fit the transmission. There may be exceptions (you DID say it was rare) but that's how I thought it worked.
Paul