So update on the 420g, Red Line D4 ATF definitely helped, but I think this transmission just has been abused a decent amount. It's more manageable and tolerable, but honestly, still not what I am after for my touring. Also, rear diff broke in great, and is as silent as a church mouse now! Very happy with it.
I figured out a solution to the transmission, at least a partial solution. I have attached an image of it below:
This is the logical solution, right?
I (once again, George was awesome, always sending me listings if he saw them) had been looking for a donor M3 for a while, but I was never happy with the cars I found (higher mileage than my wagon/pre-03/questionable drivetrain/etc.) Well, this lovely 2005 rebuilt title, 90k mile, SMG, 6 owner convertible popped up for sale 15 minutes from my house, in the Midwest, in December. I test drove the car, it drove great, shifted as well as a SMG can (I think.)
After some haggling with the dealership, I ended up as the 7th owner, questioning what I had just done to my finances.
So I think we can say the S54 touring build is officially underway.