Cylinder head was toast, so I bought a refurbished one from ebay.
Basic overview of what was done to the engine:
-Painted block and covers
-Honed cylinder walls
-Refurbished cylinder head
-New piston rings and rod bearings
-Replaced all gaskets and seals
-New temp sensors in cyl. head
-New knock sensors
-New water pipe
-New waterpump and thermostat
-New ICV valve
-New CCV
-New startermotor
-New alternator
-New coil pack and wires
-All filters and spark plugs
-New clutch
-Rebuilt shifter linkage
As far as mods go, this is the current state of the car:
Drivetrain:
Catback exhaust
Some ebay chip with raised limiter 7000rpm
4.10 diff from E30
M40 single mass flywheel
E36 M3 shift lever w/ZHP knob
Suspension:
JOM coilovers
Powerflex rear control arm bushes
Powerflex diff bushing
Brakes:
Brakemotive drilled/slotted discs
Mintex racing M1155 pads front
Mintex racing M1144 pads rear
E36 M3 master cylinder
Wheels/tires:
17" Style 44 wheels
Toyo R888 semislicks
Interior:
OMP steering wheel
Sparco Sprint bucketseats