VRSPEED
I was fortunate to be put in touch with a guy parting out a 1995 325iS in Winnipeg, and I purchased the entire power train, along with some
detail items from him.  Below are some pictures of it as it arrived.  This is the same M50B25 as I currently have in my car, except with only 120k
on it.  I have no idea how well it is going to fall into service with a turbo; from what I see on forums it looks like it is a decent platform for
modification.  At any rate, the parts will be the same for both engines, so when the smoke clears and the fires are out, I should still be able to
keep one of them running for awhile :)  You can also see the 'new' differential on the pallet.
The "New" Engine
Tearing down the engine went pretty smoothly.  The only real pain was getting the crank pulley bolt out (300 lb-ft..) and this required welding
up a wrench tool that could be bolted to the pulley in order to hold the crank in place (looks like a ghetto version of the one shown in the
Bentley manual).  Once stripped down, the block was sent out for cleaning, boring, and deck milling at a local shop in Guelph.  The block
was then scrubbed down and rinsed followed by four coats of VHT high temp engine block paint and a bit of torch curing.  Satisfied with the
condition of the block, the next step was to get the piston rings gapped.  
Pistons and rods came next, assembly was not difficult with the exception of keeping everything clean with oily fingers.. Lucas "Heavy Duty
Oil Stabilizer" was used as assembly lube throughout.   The crankshaft is an OEM S52 (Forged, 3.2L) new from BMW but bought through
TRM.  I was furious to learn that TRM could sell the crank from the US and still make a dime for $1050, where the BMW dealer 2km away
wanted $1650 for the SAME (literally, the one that TRM got for me) part... it was apparently the only one in North America at that time.  
Anyways, Plastigage  confirmed the correct clearance on the main and rod bearings (0.02 - 0.058 mm).  The main bearings came matched
with the crankshaft.
Connecting rod assemblies went in like a glove with the aid of a fairly cheap ring compressor.  The before and after pics below speak for
themselves!  The pistons are 85mm, up from stock 84.5.  
The cylinder head was in pretty rough shape; with at least one cylinder exhibiting some coolant leakage.  I initially wanted to ship the head to a
friend in Winnipeg for rebuilding, but the overall weight of the head and the container I made for it made it too heavy to be ship economically.  I
eventually decide to just take care of the rebuild myself.  This involved disassembly and cleaning, port matching and valve seat matching and
resurfacing.  I milled about 0.05mm off the deck mating surface and polished up the combustion chambers.  Finally, new springs and valves
were installed, and the whole thing was put back together.  During the rebuild the valve cover was stripped, blasted, and powder coated.  ARP
studs and a Cometic MLS head gasket join the head to the block.