I ended up going with the 2100 Rally from MM. I only have about 1,000 miles on the engine at this point and want to spend some more time with it.
So far I'm pretty happy with the engine. It keeps a lot of the character that I love about the car, it didn't mess up the weight distribution and it loves to rev more than before (redline is approx. 7700 rpm with peak power at 7300). It's a blast to rev up and the lightweight flywheel and clutch setup is great.
Somethings still need to get sorted, the shop I used gutted my cat, it makes the car sound terrible, I need to get a straight pipe or a different set up to improve this. I also feel like the tune probably has room for improvement. The engine does seems quicker than a stock M42, but my lap times at the track did not improve as much as I thought I'd see.
At the end of the day I spent a lot of money and am not sure that I got as much as I hoped to. I don't regret it because I love the M42 and the handling of the car. But, I do wonder if I wouldn't have been better off going to a S52 or similar swap and spending less or similar money.
My plans for the next few months are to drive the car until it gets too cold, then sort out an exhaust setup over the winter and explore tuning options (BMWMAN did you ever get your squid tune worked out?)