A mate of mine picked up a 1994 318 coupe rolling shell for free.
The yanks seem to have a V8 conversion kit for cheap.
The coupe's curb weight is only about 1200kg and it wouldn't be to hard to get 200rwkw out of an AU V8 engine.
Sounds like a track weapon!

Any heard of or seen the conversion done in Australia?

I just lazily found this:

http://www.bimmerfest.com/forums/showth ... p?t=216921. Hopefully give you some ideas