lol!
It's a tight fit without the spacers, just means you can't run the E34 triangular header tank. If you run a strut brace, be prepared to ditch it or modify it to clear the plastic loom covers. In my avatar, the brace just rubs on the covers at full tilt. It's not as difficult as people make it out to be, you just need to have the patience and place to do it. An enclosed carport/garage is ideal. If you know how to weld, even better. If you can make up exhaust manifolds and know the dynamics of it all, I'll buy a set of them off you!
You're limited in terms of brakes (I ran no servo assist as I didn't want to cut the strut bracing) but there are different options out there. I ran mine with an E30 M3 5 stud conversion, with a dual master cylinder setup behind the glovebox.This was more than adequate for fast track use, but road use, I would have liked a bit more stopping power for panic stops. (Different sized MC will help this as well as a dedicated pedal box to dial the ratio in.
Exhaust, you'll need to custom make it anyways, but the manifolds are the hardest.
Oh, you can't really run a quick rack eg Z3 as it clouts the downpipes. IF you were to get it all setup and then made the manifolds, you should be ok, though there's not much room between the strut braces and the rockers, you can just about get a hand between them.
Not sure about the E36 Evo gearbox, it's theoretically the same, but with a different bell housing. You could get an adapter made to fit OR cut the housing off the auto and weld it onto the E36 box
Diffs are something I'd also be looking at. I ran it with a 3.73, 3.64 and a 3.15. All slippers and all left 2 very nice thick black lines when prompted. The 3.15 was the most usable. the 3.73 was on the high side of bearable. A 4.1 is very silly unless you want to lose the 1st 2 gears.
Hope this answers a few questions.
noticed that after I posted!!