Help! Varied engine suggestions for my BMW E21??

A bit of a disappointment today, I had noticed that the valve cover on my BMW 318is M42 engine was not sitting even and I had no idea why. I called bodieandoyle to have a look who identified that my head is cracked and FUBAR'd... This obviously had happened when the engine fell to the floor as the engine crane collapsed a few weeks earlier. Strange thing is that nothing directly impacted the head and not even the sump was cracked. I'm not best pleased since I've spent a LOT of money replacing all the timing parts and gaskets. I could get another head and replace it but they aren't cheap (often replacement engines aren't much more) and there's all the hassle I've gone through with the timing chain and all the gaskets again. I think I've decided to write the engine off, especially as I don't know what else could of happened to it on the drop. So I'm back to square one where engines are concerned

I have a few options available I think, the most obvious is another M42 engine. I have one sitting in my daily E30, but I'd rather keep that as a whole. But I'm considering different options now, perhaps more powerful as the M42 is limited in how much increase of power it can take.

Please can you suggest engines to replace the M42 engine with, any make, I'm not fussed. At least 150bhp is a must, relatively inexpensive and straightforward. I'm still hoping to get this to RRG'08. My car isn't far off being completed until this was discovered today.

A few engines I've considered off the top of my head:

- BMW M42 1.8 16v (140bhp) from BMW E30 318is
- BMW M50 2.5 24v (192bhp) from BMW E34 525i
- BMW M20 2.5 12v (170ishbhp) from BMW E30 325i
- Vauxhall XE?
- Ford zetec?
- Saab turbo + omega gearbox (although I fear this breaks my inexpensive and straightforward requirements!)
- Volvo?

Please make some suggestions as I'm really unsure of what I can do, as wacky as you like! I'm leaning towards the BMW M50 since it's very similiar to the M42 and more fuel efficient and powerful than the M20. M20 would be easiest and I may try and do this for the RR gathering, especially as I have spare E21s with the correct subframe for an M20 to bolt in and I have spare 325i's to hand too. However my insurance is the deciding factor, I had a reasonable quote of £450 for an BMW E34 525i, but it might be a totally different situation within a heavily modified E21. Buying a complete donor car is not a problem, if not favoured.

A photo of my car sitting and waiting, and the offending engine.