Musings from the shop
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Haven't found the source of the leak yet, but it's something on the lower front of the engine.
I wanted to see if the awful exhaust note was because of the muffler, or the long straight pipe between the muffler and the header, so I did what any teenager would do. Pulled the muffler off and went for a spin. Still sounds like crap. Lot's of crackly, raspy things happening. Will probably put the cat back in, or maybe a glasspack, depending on which looks easier.
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The oil was being pretty sneaky by running down the crack between the timing cover and the upper oil pan over to the passenger side, but it does appear to be coming from the oil filter housing. Hopefully that will be an easy fix.
The way that I ran the exhaust makes it hard to put the cat back in without redoing a lot of it, so I'm looking at getting a tiny muffler with the inlet and outlet on opposite side that will fit in an 8" by 12" space. Surprisingly I was already able to find one at Summit.
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pretty engine bay. jealous of how much room you have.
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The gasket between the block and the lower timing cover.
When I was assembling the engine, I grabbed the gasket and bolted the cover on without thinking anything of it. Then when I got done, I noticed that I had an extra one of those gaskets... odd. By this time I'd forgotten that the other gasket was a different style, so I assumed they had just put an extra one in the package by accident.
Needless to say, they weren't the same at all. The one that I put in the first time was for an M44 engine. The gasket set that I ordered was only listed as fitting M42s, so I had no idea that there were any M44 gaskets in the set. Luckily nothing was blocked off by the gasket, and everything that needed to get oil was getting oil. I guess it's my own fault for not paying closer attention.

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Thanks Earl.
It's back together now. No more leaking fluids that I can see. I also got the resonator installed and the exhaust sound a helluva lot better now. There are still a couple small issues that I need to track down, and some things that need to be buttoned up, but it's a runner and a driver now. I haven't gotten on it too hard yet, but the M42 definitely pulls harder than the M10. It's been so long since I've seen it with a hood on, it actually makes me double take when I walk past it. Hopefully I won't have to take it back off again for a while.

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Looks gooooood
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It's the cutest little muffler that you'll ever see. A 7.75"x11" Thrush Turbo. That's smaller than a sheet of paper for those keeping score at home.
Overall, I'd say the exhaust note suits the car really well. It's not super quiet like modern cars, but it's not obnoxious like some rice grinder either. I put a nice band-clamp style connector before the muffler at the back of the car, so if I want to make some noise with it, I can drop the rear muffler in a couple minutes.
I'm still going to be super busy for the next week or so, but after that I'll get some good pictures of everything and post 'em up.
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Posting this here for continuity purposes: http://www.wibimmers.com/board/index.php?/topic/3895-no-home-no-destination/
Been sluffing off, waiting for a job to come my way here in Madison. Picked up a turbo for a future M42 build (td04hl-16t from a Volvo 850 T-5). Did an autocross at the Road America kart track this past weekend. Had a blast as usual. Even with the M10 I was having trouble putting power down coming out of the corners, but it's definitely gotten worse with the M42. I think I'll be putting the turbo on the back burner in favor of coil-overs, LSD swap, and decent tires. Chassis before power, zee, zee, zee...
Looking for some lightweight, low-ET, 15" wheels that won't look redonkulous on an e21. If anyone comes across any, let me know.
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