Sean at Autobahn BMW salvage in San Diego told me the following, I contacted him about finding a used M42 motor.
I bet you had a oil fed tensioner go bad and take out the timing rail. If the motor makes a racket in the first 1-3 seconds when it's cold... bad tensioner. I have seen this 4-5 times.
Questions is, what can be done to ensure the chain tensioner doesn't go bad??? Anyone else have any thoughts on what went wrong?
I found a used M42 in the SF bay area that came from a 91 318is that had been totalled in spin in wet conditions. The M42 donor motor has 160K on it. I asked the shop to put in a new timing chains, chain tensioner, water pump, thermostat, oil pump, , motor mounts, new hoses under the intake manifold and elsewhere. While the engine is out, check my clutch because my car has 129K on it and the clutch has never been replaced. Donor engine had 5 speed attached to it. Maybe donor engine has a good clutch that was replaced in the last 5K but that's wishful thinking. Anything else that needs to be replaced before motor goes back in?
G-Man