M3 diff and rear subframe is probably the best way to go if you are dead set on putting in an LSD, BUT it's not going to be inexpensive. There are several things to consider here. You have a 328, which without any modification to the engine or HP seem to tear out rear subframes on these cars. It can be fixed and if you plan on installing the M3 LSD then you should take the time to install one of the subframe reinforcement kits that are out there. I know there are at least two, Turner comes to mind but can't remember the other one. have it welded in by a shop and then mount the M3 subrame. You'll also need adjustable camber arms in order to align the rear end in your non-M once you shift over to the M3 subframe. Also take into consideration that the stock M3 diff is 3.62:1 which means that you'll be turning quite a few RPM going 60 in 5th gear, and first gear will be all but useless.
/// Auto => 6-Spd Manual Conversion | Apex EC-7 | Koni/Ground Control Coilovers | Vorshlag Camber Plates | Meyle HD LCA | PowerFlex bushings | GruppeM CAI | Shark Injector | 6000k HID's and Fogs | BMW European MTechII | BMW Performance Shifter | ACS Mirrors and Rear Spoiler ///
Last edited by TitaniumCranium; 10-30-2012 at 12:14 AM.
Reason: correct diff ratio