The reason I think the Tune-O-Matic might not work with the Mustang vibrato is the breakover behind the bridge is tighter than on a Jaguar/Jazzmaster. That said, I have played the CP Jaguar before and yes they stay in tune very well. Typically the harder the breakover, the more friction, and friction is enemy when it comes to vibrato units. That's why I suggested the Graph-Tech saddles.
I'm a bit skeptical about vibratos on the Cobain guitars, especially the Mustangs, because Kurt Cobain was well known to never touch the vibrato on his guitars. Fender provided the bar just to keep it complete expecting most of the people buying these things to keep the bar in the case. I've used the bar on a Cobain Jaguar, it works fine.
typically on vibratos the main friction points are the bridge saddles, and the nut (I use #1 pencil lead in mine, and I ABUSE the vibrato on my Jag-Stang like a Floyd Rose, the funny part is I find the Jag-Stang more solid and reliable than a Floyd XD), and in some cases, the string around the tuner itself since some people wrap them all messy and then the string lands in a different spot every time the bar loosens the string causing the tuning to drift. Also stretching them out is a big part of it too - people say to stretch the strings out compleley, but on vibratos there's sort of a middle-ground you want to be on to keep them in tune where they are not so stretched out they go sharp after using the bar, but not so un-stretched they go flat.
