I'm guessing you've got the starter bracket for the 2bbl intake manifold, the one that has an extra portion that goes up to support the manifold. The earlier starter brackets (#12 41 8 720 035 appears to be NLA) simply supports the starter only and does not extend up to the manifold.
1) You can go the simple route and cut off the offending portion of the bracket. Pretty simple if you ask me.
2) Get another bracket for the 1bbl earlier '02 that doesn't have the offending extra portion. Also simple, if you know of a nice BMW dismantler like...
http://www.double02salvage.com/
3) Get a "new" rebuilt BOSCH 2002 starter (bosch # SR71X or BMW #12 41 1 466 096) as they're now the new style like the E30 M3 ones. They're just not as powerful as an "M3" starter. Yes the smaller style doesn't require a support bracket like the much heavier original type. Also there's more room to work around them, thus being much easier to install too.
See more info on the "new" SR71X Bosch starter here....
http://www.bmw2002faq.com/component/option,com_forum/Itemid,57/page,viewtopic/p,275704/highlight,/sid,1103ed322a5dcf00095c80c0769be911/
4) Get a used or rebuilt Bosch e32 or e34, 735i or 535i starter (this is what I use), they're also of the smaller style and more powerful than the M3 ones.
5) Spend lots of "doah" on a M3 starter for the bling factor..... :-)
Also, for those of you OLD Schoolers out there.... NEVER hit one of the newer permanent magnet style compact starters with a HAMMER if it gives you trouble. You WILL break the magnets inside, ruin the thing and void any warranty on it!!!