I agree with WSSix. You can use the old 109 block (Buick GN motor) or you could go with what a lot of people are leaning towards (myself included) the 3800 Series II or III that is found in every 90's-10's GM sedan available. The L36/L26 NA motors are around 9.5:1 compression and can handle 15-20 lbs of boost in stock form. The L67/L32 supercharged motors can handle more since the pistons have better ring landings.
You can get those motors all day long complete with harness and computer for $400.
The best part is the amount of space you will have available and you will still be able to mount up a manual transmission. Not the best comparison to a BMW, but here is my 3rd gen Camaro with it mounted up.
