Dieselmeister,
i'd go with what Gunni said re 3.5 vs 2.5. with forged crank etc as standard and a litre more capacity it's a better bet for outright power and shouldn't cost more than an M20 to put together in terms of the turbo system. my system is frankly pretty crap in terms of manifold design/turbo design/small downpipe and it still goes pretty well.
the downside is the hassle and cost of fitting the engine to begin with, and of course a little extra weight over the front.
what i would say though, is that while i don't spend much of my life worrying about bits breaking, i would be concerned about 500bhp and god knows how much torque through an E30 drivetrain. the standard M30 box might take it but the clutch probably won't - mine's ok, but trying to slip it to keep the revs up for a quick start is a no-no, once it's on boost it just gets cooked!. similar story with e30m3 prop, e30 diff and driveshafts - i'd be thinking about a custom prop and rebuilding the rear subframe to fit an e28 m535i diff.
what i'm trying to say is, if you're really after 500bhp then beefing up the rest of the car to cope might make the cost of the engine a bit less significant
