I went and talked to the mechanic today, and I don't have any lower end damage to my motor. Phew. I do have bent intake valves (he said that the exhaust valves might need to be replaced, or they could be ground) and nicked pistons. I should get everything sorted out in about two weeks. I'm glad to finally get work done.

It was pretty cool seeing the motor torn down though. There was lots of carbon build up on everything. Here is a link to the pictures: http://www.bayareamotorsport.com/~jjbk/brys_pics/brys_cars/1988_e30_m3/Head%20Rebuild/

Here are my bent intake valves:

http://www.bayareamotorsport.com/~jjbk/brys_pics/brys_cars/1988_e30_m3/Head%20Rebuild/MVC-005F.JPG

insightful pics.