This is an issue that all S50 / S54 M-Powered owners should be aware of.
This issue affects BMW E36 M3, E46 M3, Z3m and Z4m.
M-Powered engines are designed to rev very high, as a result huge amounts of mechanical strain are placed on the engine. BMW utilized solid lifters in the cylinder head to counteract valve float, con rod bolts however have always been a weak point on these high revving engines.
In the pictures on this page you can see that the con rod bolts have stretched allowing the shells to spin, causing the rod to oval. Lack of lubrication can also cause the shell to spin as it can bind to the crank and spin within the con rod.
We would advise all of these affected vehicles to have the rod bolts replaced with uprated ARP bolts as they are made to a much higher spec (used predominantly in racing) and as a result do not stretch.
By fitting new ARP con rod bolts and servicing more frequently (only using Castrol Edge TWS 10w60) this potential disaster can be reduced. An absolute must for the anyone who uses their M3 on track.