The engine "should" work in an E30, stress on should. The guys over in the E30 forum on
http://forums.bimmerforums.com/forum would know more about that. Also, I'd check out over there for people selling their cars. Great group of guys there and very knowledgable. I split my time between this forum and that one.
Car looked really sweet. Sorry to hear it was totalled but at least your bro is alright. Someone should yell at that instructor too... hands have to stay IN the car. If you're gonna hold onto something, hold the oh shit bar, not the side of the door... shame shame shame... caught red handing in pictures
Good luck with your search!