The M10 flywheel is pretty easy to fit actually (I've done it to a M50, but the M42 should be the same)
Recipe:
M10 228mm flywheel
E30 325i pressure plate and clutch disc
Dual mass E36/E34 M12x1.5x50 flywheel bolts (11 22 2 243 051)
323i throwout bearing (the tall one)
Remove the ring gear from both flywheels, some tapping around with a hammer should do the trick, otherwise try heating it a little.
Toss the M42/M50 ring gear into the stove, it has to expand 1-2mm IIRC, so it needs to heat up quite a bit (not red hot, but close)
Pick it up, preferably not with your bare hands, drop it around the M10 flywheel and make sure it's on there solidly and even.
Let it cool down for a bit.
Shorten the flywheel bolts a bit, not sure how much it was, just measure the thread depth in the crankshaft, the thickness of the flywheel itself and do the math.
Make sure the shortened bolts get something of a bevel back onto the ends so they don't ruin the thread in your crankshaft.
And don't forget to use thread sealant.
Assemble.
I've used the shorter E30 TOB and had to lengthen the slave cylinder rod a bit (10-15mm IIRC)
So far the entire setup has been working perfectly for some 35000km in my E28.