Does the Z3 have a "S" on the tag to denote a LSD like the clutch pack 25% e30 diffs? Only a couple well supported Z3 forums I've found with out much information.
Had a hit on another board for an open 4.27 for $225 so I may go that route unless something cheaper shows. Not really sure what market value is for a small case 4.27. Any ideas?
I have purchased two Z3 4.27 Torsen diffs just last year. One is in the car and one is on the garage floor. Neither has the S on it. In fact, neither had the traditional metal tag that the E30 diffs do, just a paper label on the top showing part number and bar code.
In my opinion an open 4.27 does not make a lot of sense. To me, a 4.27 in a manual 318i is for tweaking acceleration at lower speeds which is mainly useful in some motorsport like autocross or track work and in those cases you must have some sort of limited slip. For street use, the 4.10 ratio is fine and there are lots of open 4.10s around almost for free. The clutch type 4.27 LSD unit is fairly rare and so can be $400 and more, but used ones between friends go for around $275 or so.
The last time I looked around for Z3 4.27 diffs I found a few hits at wrecking yards across the country at around $250. The two that I bought cost me $375 and $110, shipping not included.
I wanted to add that there is some controversy about the advantages of Torsen/Quaife type diffs (generically called gear-type Automatic Torque Biasing differential) vs clutch type diffs amongst serious racers. The issue is that a basic Torsen stops transferring torque to the wheel with more traction when the other wheel has absolutely zero traction, such as when it is up in the air. It basically reverts to behaving like an open diff in this situation. (There are exceptions to this in some versions, where some drag is designed into the diff to avoid this) Serious racers feel that this gets in their way when they are flying their car over track curbing or other irregularities, so they seem to prefer clutch types which continue to transfer some torque to the wheel still on the ground. I've heard that some 4wheelers use the handbrake to force some torque transfer to occur when wheels are up in the air. I can't imagine having the time to do this sort of thing on the racetrack though.
I can say that in my autocross experience, which is not extensive, the Torsen works very well. Car setup and control needs to put some attention to keeping both rears on the ground, for example by using a very stiff front anti-roll bar and tolerating a slight lift to one front wheel instead. It is not easy for an E30 to keep all four on the ground, so I am told. The advantages of the Torsen are mainly that it is seamlessly progressive, or in other words, very very smooth. There are no sudden changes when shifting the torque transfer, when getting on or off throttle, in any situation because there is no clutch engagement/disengagement. So, when decelerating into a corner, there is no push due to disengagement delays or transients, for example. The other advantage is perhaps less exciting in that the Torsen has no clutches to wear out and it does not generate as much heat as the clutch type in extreme driving, so fins aren't that critical on the diff. So the Torsen will not wear out any sooner than an open diff, and in fact does not really need the friction modifiers in the diff lubricant either.
Some well known vehicles come with Torsen diffs and its close relative the Quaife diff is very popular amongst performance car enthusiasts. Miatas ('94-05) come with Torsens, as do some S2000 versions, Audi R8, Mazda RX8, Subaru Impreza WRX Sti and many more. Hyundai uses it in the Genesis coupe, and Torsens are popular in four wheel drive vehicles because they play nice with the torque transfer mechanism between axles.