I have an early e30 323i flywheel (its 2 kilos lighter than the average m20 flywheel, so is 6kg from the factory, no need to lgihten

And will be bolting a 323i starter straight to the engine. Was intending to run the 3mm spacer to maintain factory spacing of the ring gear.
I'm also intending to run the m20 TOB as i got one with the clutch kit. I will be modifying the clutch fork if neccessary to get the extra travel as the e21 323i TOB was $190!!!!. But really i just think it will mean you have to push the clutch pedal further. Will have to find out with some testing yet.
When i am doing stage 2 or 3 of the build i will consider removing the flywheel and doing the modifications neccessary to fit the m42 ring gear...the m20 starter motor is 4kilos heavier!