Did you install a camshaftsensor on the M20? A M50 DME will not work properly without it.

I wonder if this will work...

Run the enigne without a thermostat then bleed and squeese everywere . Fit the thermostat back in place and check.
I think that would do.

I don't know the mile per gallon, I do know km/l for a 530 it will be 1L on 11 km for a tds 1:14 I think. A big problem with the 530's are the valves in the inlet manifold. These are closed on low RPM and open on high RPM. I think these control the amount of exhaust gasses from the EGR. Anyway these...

I bleed a M30 always with the front end of the car raised with a jack. Then it's done in about 15 minutes.

Just use a 3.07/3.25 lsd from a E28. Or for drifting a 3.64