Well, on a 2.8, odds are a K&N isn't really going to have much of an effect...in either a stock housing or otherwise. Flipping the air cleaner lid probably isn't a huge improvement in flow, and you give up cold air from the snorkle for hot engine compartment air.
There are some interesting
tests at bobistheoilguy.com that suggest that the K&N media lets in a good bit more particles, for a very small improvement in flow.
All of that aside, I have a K&N, which I have used in the stock housing...there seemed to be a slight increase in throttle response, but very, very little.