BMW: Engine Replacement, intake manifold gasket, ford transmissions

Question
Although I own a 1994 325is, I hope you may be able to provide some insight on my situation.

After being unable to start my car one morning I had it towed to a local BMW mechanic.  A vacuum leak was repaired in the intake manifold gasket but still wouldn't start.  Compression tests revealed that 3 of the cylinders had near zero readings.  Also, I had only two quarts of oil in the crankcase.  It was recommended that a used or rebuilt engine be installed.  Labor charges alone amount to $1650.  The car has 183,000 miles on it and is in good condition.

I am considering replacing the engine myself. Does the manual transmission have to be removed first before the engine can be removed or can the front end of the transmission be temporarily braced?  Any other suggestions/options/tips you may have will certainly be appreciated.

Thank You,
Mark  

Answer
Mark,
 This is most unfortunate, as this will be an expensive venture.  I'm guessing the lack of oil was the cause of the compression loss, probably due to the piston rings wearing down.  
 Ok, so on to the engine removal and replacement:

 I dont know if you have ever removed a transmission from an engine, particularly a Manual transmission?  If you have, then you know how tough it is to align all the splines on the input shaft so it will slide onto the back of the engine.  I have done this several times, and it is not fun.  Luckily these BMW transmissions are relatively light compared to 200+lb Ford Transmissions.

 So if you are removing the Engine, why not pull the transmission out with it?  I have done this as well, and it saves alot of heartache.  It's a little harder to get out, but believe me, when you are reinstalling everything, you will thank me.

 Dont get me wrong, you "CAN" leave the tranny in there, but it's such a pain to get to the bell housing bolts, that it's not worth it. Then, during reassembly, you have to spend an hour trying to get the tranny to match up to the engine, with no room to work.

 So once again, i would remove the radiator, all the accessories, and wiring from the engine.  A good habit is to place tape on each connector and write where it goes.  When you have that engine out, it will look like there are connectors everywhere.  So as you remove a connector, put a piece of tape on it and write where it goes.  reassembly will be a snap.

 Things to look at when the engine/tranny are out:

 -Check the clutch, no better time to replace it than now, you already have the tranny off and it will be easy to get back on while it's out of the car.  Check the FlyWheel as well.  

 -Check the Tranny fluid, if it hasn't been changed recently then put some top quality tranny fluid in there.  I think the Transmission you have requires ATF instead of gear oil, but YOU should double check that.

 -Check the seals on the tranny to make sure they are not leaking.  There is a seal on the rear shaft, and one on the front shaft.  Once again, you dont want to have to replace these later, so do it while it's easy.

 -Check the shift lever bushings, these are notorious for wearing out, and causing a sloppy shifter.  there is also a bushing on the back of the transmission that the shift linkage connects to, this wears out as well, and it is IMPOSSIBLE to replace this while the tranny is in the car. (especially the older cars).

 When you are rebuilding the engine make sure you take it to a quality rebuilder.  With 183k miles it will probably need to be bored at least .5mm (.020").  Some people will say "Ah, just hone the block and slap a set of rings on those pistons... it'll be fine".  It would probably run that way, but you have obviously worn something out in the engine.  I will bet money that the cylinders are out-of-round now, and probably egg-shaped (you can't see it with your eyes, but a bore gauge can!).
 If you are going through all this trouble, it's better to do it right, and buy new oversized pistons/rings and bore the block to match them.  This is a very common practice and I have done it my self on an '87 325i.
 
 Another thing is, that you should always run a quality oil in these engines.  Many people see Mobil-1 as "too expensive" or something like this.  Well lets do a little math.  
 5qts Mobil-1 15w-50 = $25.00, 15k mile change interval
 5qts Castol conventional 10w-30 $15.00, 3k mile interval

 The conventional has to be changed 5 times, for one change of Mobil-1 SYNTHETIC 15w-50.  So add up the prices and see.

 Hope this helps,
 let me know if I can help with anything else.
 Josh