Apparently this is it, after a morning of having it on the hoist - it's f-d royally: piston rod bearings failed and seized, likely causing the initial and few seconds of knocking/rattling. Piston rod then fails... it (or possibly they, wasn't clear from the description) broke catastrophically, rod itself smashed through engine block, as well as one of the connecting rods. Oil leaked on ground was not from a fallen off filter or oilpan bolt, but a f-king smashed out hole in the side of the engine block when metal snapped at 4,000 rpm and went all to hell. I'm sure a replacement M3 engine is cheap at least though... uhhh, or not. Apparently a known issue for that era of the engine.
Since I was riding with my co-worker who seems to be embodiment of Black Death himself at times, I now have more twisted metal to wall mount than his famous snapped drive shaft.
I needed a living room ornament anyway, a butchered high horsepower inline 6 might be the way to go.