Dude.....your strut is coming through the Rear Shock Mount tower......Buy new RSM's for 99$
Couldnt tell you if your springs or shocks are done. But you need new RSM bushings at least. Fix that as it will start to smack, cracking the tower, subframe. You name it.
2002 Phoenix Yellow E46 M3 l 6MT l Nappa l Nav l STG Coilovers 7k/8k l BMW Performance SSK l OEM ZCP's l Kirk Roll Bar l Motorsport Hardware l Besian Systems l CSL CF Trunk l GTR CF Hood l CSL CF Diffuser l Status Gruppe