I agree with X53. Plus, you are putting a lot of effort and time into the suspension, yet you don't have a clear handle on whether the motor is even any good. Obviously, do what you want, but if it was me, I would prioritize getting the thing running correctly, than get into the ancillaries. For reference, I too thought I had a great deal on a 2001, but have been "challenged" by an engine issue from day one.
http://www.bimmerforums.com/forum/sh...-Can-t-Be-Good
These are super expensive to repair even if you are doing the work yourself. Would love to know what you paid for it if you don't mind sharing. These can make great stories for the uninitiated. If you tackle it, and it's not your primary ride, it can be a great project and learning experience. Please keep us posted.