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I have always argued that the short neck diff is inferior in design to the earlier long neck diffs for this very reason. Replacing the front seal on the diff also requires the replacement of the crush collar or sleeve because the same nut serves to hold both, the flange and crush collar in place. Once you release torque from the crush collar, you got to replace it. This is not the case with the long neck diff where you can remove the flange and replace the seal beneath it without worrying about releasing torque on the crush collar which is torqued down by a separate nut deep down in the neck. Loosening the crush collar nut on the long neck requires a special tool. The long neck diff also holds a little more oil and is slightly heavier. And, if there is any place where you want more weight on an 02, it's exactly hear. BMW probably ditched the long neck design in 1969 because it was more expensive to produce. A lot of 02 owners here in the US seems hell bent on replacing their long neck diffs with the short neck version because they are hell bent on installing the popular short neck 3.90 diff from the 320is. But, in the process they are just installing an inferior diff. They do this because the 3.90 long neck diff is rare in the US, and there are a lot more short necks available, especially in the 3.90 ratio.

I don't paint the trunk and engine bay unless it is absolutely necessary. But, I disassemble my cars and sometimes strip everything to bare metal. I do my my own bodywork, I spend about $2,000 on paint and materials, alone, probably more. A good quality paint with reducer and hardener costs about $1,500 / gallon. Most shops will not use the highest quality paints manufactured by any particular manufacturer. They usually use the "Shop" lines of paint which are the cheapest. This is what they are accustomed to using on the insurance jobs etc. It's all a matter of profit margin. Furthermore, they are mostly using 2 stage paint systems; a matte coat followed by a clear which adds the gloss. It's a cheap way of creating that mirror like gloss;instant gratification But, these paints are inferior. Even the best ones are engineered to last about 10 years when exposed to the elements before the clear starts peeling. Non-factory two stage resprays will often start peeling within 5 years. These two stage systems also lack dept. The high quality single stage paints are no longer mass produced due to air quality mandates. Most painters are also unfamiliar with using this paint. You will end up paying a premium to get a premium single stage paint job even after doing all the disassembly, stripping and bodywork. A lot of the classic car collectors, especially the Porsche folks, insist on using single stage for that authentic look from the era. I'm about to embark on another paint adventure this coming Spring. I'm not looking forward as the process will most likely take me about six months to a year to complete. It's the stripping and bodywork which is most time consuming.

They were available in the $40-$60 range until recently. The larger ones for the 2002 and 320i are still relatively cheap. The prices may have gone through the roof because they may be manufactured in smaller batches these days. I don't know.

I don't know anything about the 5 speed trans used on the 318i. Does it use the same 215mm pressure plate and clutch as the later 318i ? As far as the 5 speed overdrive transmission used on the e21 320i is concerned, I believe that it can be mated to the earlier versions of the 1600 motor which uses the 6 bolt crank and corresponding 200mm style flywheel, pressure plate and clutch. I personally have not attempted this, but there are a few other members here who have done it. And, according to them it works. I have long postulated that it will work because the 1600 uses the identical throw-out bearing as the later 2002 which uses the 215mm clutch. And this 215mm clutch is the same pressure plate and disk used on the 320i with the 5 speed overdrive. So, the critical overall height of the throw-out bearing along with its diameter is the same. The only difference on the 320i throw-out bearing is the point on the bearing where the tabs are located for the shift fork. The shift fork on the 320i is different from that of the 1600 and 2002 which use the same shift fork. Because the shift fork is different they just relocated the tabs on the otherwise same throw-out bearing. Since your car is a 68 1600, there are a number of other things to be juggled or worked out, as it is more challenging installing 5 speeds to the early pre-1969 1600s. If you are the do it yourself wrencher and have access to parts, it's doable, but you got to pay attention to a lot of details. If you are counting on someone else to do the work, you got to have deep pockets. But, even then, not all BMW shops working on 2002s are familiar with the early pre-69 cars. 1. As someone mentioned above, you will have to convert to hydraulic clutch actuation. And, there are two ways to achieve this; a. You can remove your existing pedal box and modify it to accept a mount for the clutch master like on the 2002. In this case you need to have some welding knowledge and be very familiar with these pedal boxes. In other words you will need a 2002 pedal box as a model. The advantage of this approach is that you don't have to replace your existing brake booster and tamper with the brake lines. But,you will be left with the single circuit braking system, if that doesn't bother you. This is the set-up I have on one of my cars. I'm happy with the single circuit brakes. They work for me. The brake master on the 68 1600 is unique to that year 1600, only. Rebuild kits are impossible to find, and there are no replacement master cylinders available. You can switch to the shorter stubbier brake master as used on the 66-67 1600, though. Rebuild kits are available for this earlier version from an Alfa Romeo supplier for under $20. b. The more common route is to replace your existing pedal box with one from a 2002 or late 1600 (1970-76). In this case you will have to also use the more common brake booster as used on the 2002. In this scenario the braking system can be left as single circuit, but you will have to tamper with your existing brake lines and re-route and bend them to the new location of the master. This route also allows you to upgrade the braking system to dual circuit brakes as used on most 2002s and later 1600s. With dual circuit brakes, you will need to install additional brake lines up front and install the dual circuit calipers. As far as brake master cylinders you can use the 320i brake master if going with single circuit brakes or the brake master as used on the 1969-1976 2002. These brake masters are readily available al relatively low cost. We haven't even gotten to the driveshaft and shift linkage shortening, yet. There are many kits available, but if you want to retain the long neck diff, you will have to get that driveshaft shortened by a shop. I doubt there are any kits out there for long neck diff cars. The long neck diff is a better quality diff compared to the more common short neck, but other than the 4.11 ratio you don't have many other choices here in the US. Sure, there is the 3.64 ration long neck diff used by the 2002 for its first year of production, only. They are not very common. You can also hunt down a 3.90 long neck from some of the Neu Klasse cars. With a 1600cc motor you will need the 4.11 diff, especially if installing a 5 speed overdrive, but if you ever install a 2 liter motor, you will most likely prefer a 3.90 or 3.64 gearing for the diff. Otherwise it really is not worth the effort of going to the trouble of installing the 5 speed because the 2 liter, 4.11 diff and 5 speed overdrive combination will almost take you back to the same overall gearing in top gear as the stock 2002 with a 4 speed and 3.64 diff. One of my 1600s is equipped with a 5 speed overdrive, a 2 liter engine and 4.11 diff, and I'm not very happy with the gearing. I don't want to go on a tangent with engine swaps, but it's good to look ahead. From my 40 years of experience with these cars I suggest you leave your existing 4 speed in place if it's working fine. And, if it doesn't work well, I would have it rebuilt or replace it with another 4 speed in good working order. If, you're hell bent on getting a little more top end out of your motor, you can hunt down a Neu Klasse 3.90 long neck diff which will increase your top end By 5% and lower your rpm's by the same amount. The 1600ti was equipped with either a 3.90 or 4.11 diff. If you really want to increase the top end by a more noticeable amount of 12%, you can use the 3.64 long neck diff from the 1968 2002. I tried this on one of my 1600cc cars. And, it worked better than I expected. I lost a little bottom end torque which the 1600 likes when you have more than one passenger in the car. But, on the freeway this gearing is just right for the 1600. It's a much more economical and easier route. If you don't like it, you can then go the 5 speed overdrive route. Also remember that the 1600cc motor is much more at ease with high rpms than the 2 liter. This is because the 1600 has a shorter stroke. If you installed a 2 liter and left your 4 speed and 4.11 diff in place, your car would feel like a truck, and it would really hate to run at freeway speeds. The 1600 cc with the same gearing is much more at ease on the freeway. The short stroke M10 motors are very different animals from the longer stroke M10 motors.