Well I "sold" my E28 to a good friend a few months ago and he never paid me so I took it back a few days ago and it is just in terrible condition now. I bought it for very cheap almost a year ago and it was not in bad condition. But now it makes a terrible clunk/thud when turning the steering wheel, there is a lot of play in the steering wheel and the wheel vibrates very violently on the freeway. What are some things I can check to cure the loud clunking? I was going to put it up on some ramps and look at it today.

My guess would be that your friend broke the steering box where it attaches to the subframe. You should be able to see if it is broken by having someone turn the wheel back and forth.

Yea that is the problem, I talked to a friend that worked on it a while ago and he said it was starting to crack back then so it must be real messed up now.

Sounds like your "good friend" needs a swift punch in the groin.
There are repair kits for the steering box problem. They basically add a bolt through the front crossmember, iirc.
Good luck

Really? Any clue who makes it? Or anyone have any experience with this? And how much did it cost you to get it re-welded if any of you have.

Here you go: http://www.mwrench.com/ Ed raether has the best fix out there for the money.

I don't see anything for E28's on that site?

Look at the e24 steering fix. It is the same as an e28.