Googling and the internet will only give you a image of the small percentage of any issue, not the vast majority that have no problems and thus do not come to the internet to bleat about it and vent their pain. I wonder how long that English car was driven like that to tear such a massive section out of it. Surely a routine service looking at a known issue would have picked it up long before it got that bad, how could anyone ignore the racket it would have made under heavy acceleration for so long? IMHO a serial abuser drives that car.
Is this the issue with the failure of one of the VANOS unit mounting bolts that you are referring to Bernice?
For 2010 - 2012, this is a well known issue as this bolt was used at many points in the vehicles assembly and there is an updated version of the bolt for use in the E46 M3 S54 engine (and MZ3 and Z4 M). If a certified mechanic hadn't replaced it then he/she is a doofus. The Fillister Head Screw VANOS Mounting Bolt was Updated and if one lets go the ECU has a check light that comes on if it senses the system is out of sync. So if someone ignores a warning checklight then perhaps a horse and cart is more the mode of transport for an owner chooses to ignore it.
Other marques use cam phasers to achieve Variable valve timing which are less complex ( electrical even ), the hydraulically operated VANOS is an engineering marvel. Admittedly needs 'fettling' and a lot of love that the average punter has little sympathy for, I have seen one photo sent to me off the Internet of a S50B32 that had grunge/sludge the consistency of treacle and candle wax smothering shafts in the cam box, yet it was still working.
Whilst not the same generation VANOS, I have had a South African E36 M3 import on my lift that belonged to one of my suppliers. Rare as hens teeth down under, as this was a very old Dealer Tech demonstrator for the BMW courses they put their Techs thru Downunder. The fear spread by some of these internet campaigns had even him worried. His is an E36 it was there that the rear frame issue first appeared ( you would have thought that BMW would have addressed it before the E46 was released ). He was happy to get him self dirty to save the horrific quote he got to check it and fit a kit so We stripped the section and found nothing so re applied the seal / deadening & put in aftermarket bushes.
So yes as in posts above I have only heard of the M3 series models having this issue, there is massive amounts of power in these upper M' spec models shoehorned into a midrange sedan body. If you drive any car hard for long enough it WILL FAIL, couple that with the increase in specific power output and there is a greater opportunity for failure. I understand that there are chassis repair and reinforcement kits available for the E46 so perhaps BMW should have had a production line strengthening kit to insert into the M3 models and changed the bush design before it left the factory.
I guess this is the rotten fruit of CAD design to a lower common denominator when the higher spec model pushes the outer envelope of structural integrity of a common body shell and how bean counters that now control manufacture limit the costly 'over engineering' that once we looked upon with admiration. Reflects on the old one liner " Built to last" Not much is built to last anymore such is the evil of design obsolescence.
For an average looking sedan that trundles along in traffic sipping fuel like a tea toteller that has the combination of a frantic, rev-hungry engine and responsive handling that has the ability to put your testicles in the base of your throat when you open the taps it is a desirable car that I know will hold its market value as time goes on.
Basically I find the lack of faith in German Engineering disturbing, but one thing should be pointed out, just because you can buy a car that once cost, eight, perhaps even ten times what your’re paying now don't forget that while the cost of buying the car might have dropped, the cost of a certified Dealer maintaining it probably won’t have done the same. It probably costs just as much - or more.
Not that anyone cares but for my 2 cents, Bernice if you can find an unabused, unaffected chassis fit a strengthening kit/bushes and the rear end is bullet proof. There is a knowledge base of which parts are weak like the bolts on the camshafts which have uprated parts. The Gen 2 VANOS is not that fiddly but needs to be fed good fluid to be reliable.
It occurred to me that you do indeed think like an engineer, you had an opinion offered to you and you did your own analysis and reported your findings - excellent I wish more folks had independent minds, for someone who has more engineering acumen than I will ever have I think a E46 M3 is still a choice that you (c)should not discount. Your Miata has had so many improvements why expect the BMW could not benift from a bit of your vast engineering skills.
Be wary of the early SMG transmission failures (rare) and avoid the auto, A manual E46 M is a stunning car but it will steal a big chunk of your money if you can't turn that spanner yourself, but for those that I meet that own one they don’t mind because it has already has already stolen their heart.
PS
Not that all of it is relevant but to get my head around the E36 before we dropped the bum I was sent these links, the E46 is different but I'm not sure that massively different.
http://www.bimmerforums.com/forum/showthread.php?1214180-Suspension-Overhaul-FAQ
http://www.m3forum.net/m3forum/showthread.php?t=308718
Kungfut the 2 E36's with the rear suspension problem you sorted, at what location did the fatigue cracks materialize (rear shock towers?), this was the reason I bought the Big Foot reinforcing plates for one of my X's. Anyway the reason I ask is it has been a few years since that M3 has been up on my lift and a quick look at it again seems justified.
Oh & the Euro 3 litre has a better reputation than the larger 3.2 engine if my grey matter is firing correctly today.
