DPM77, good eye, that is indeed the WH shop. The idea for the cut out came after putting in the F-150 PS. there was this big, ugly, gap in the fender from the old Scout box. Instead of trying to fix the gap, I decided that cutting all the way back was the way to go. Kind of like the old-school hot rodders did by putting louvers on the sides of their hoods (or removing them completly).
The cutting process was pretty straight forward and was done with a cutting disk. Of course there wasn't a motor in the engine compartment at the time, so that helped a lot. It should be fairly straight forward if done during a header install/swap as well. Still, it's possible to just "reach around" and cut what you can. Snips should work ok if room is that tight. Heck, a Dremel and a lot of it's disks might even be able to do the job (it be slower than a bigger air-driven "Dremel" though).
The cost for this mod wasn't significant since it was just a matter of cutting the inner fender off while the motor was out. As for the support, it doesn't look like there's going to be an issue. I wouldn't stand on the inner fender or anything, but it's not really carry a huge load there anyway and I don't think I gave up anything in the swap department. Also, in that picture, remember that my rig also has a 2" body lift, so individual result will vary with what type of BL you have.
Hope this helped! Also, thanks for kind words on my personal money pit. Maybe I'll even drive this thing some day!!! ;D