I am wondering how difficult it would be to swap an e36 diff into an e34 case... Does anyone know 1 if its possible, 2 how much time it would take, 3 would it be reliable?

My understanding is yes, most diffs are interchangeable between the cases during that era. I was looking at a new euro M 3.64 diff for an E36 to swap into my E34 case and my mechanic (BMW Master certified was pretty confident they could do it). But you will need far better expertise than I to verify. I went with a full case swap because it was quicker, less costly and at a better ratio for me (3.15). Good luck!