What do you gain by doing an e28 suspension swap on an e3?
My impetus for swapping over started with the realization that one of my LCA's had some angle iron welded on to it, perhaps it was cracked at one time. I found some replacement LCA's in SoCal, but in my research I came across an article on Bill Arnold's Bavaria detailing how he installed an E28 suspension under his E3. I was also looking at installing an LSD at the same time. I realized that it would be much less expensive to do the E28 swap, as these rear axles are very readily available in local boneyards with LSD center sections. I happened upon a great deal on a complete 3.25 open rear axle for $75 in the Bay Area, bought that and found a 3.25 LSD in my local P-n-P for $80. I went through some gyrations as to the differential mounting until I discovered that the early E28's have a centered mount on the diff cover that bolts directly onto the E3 mount. Transferring the sway bar over required welding some brackets, and the brake lines needed to be re-run.
In addition to the 3.25 LSD center section, I have acquired a 3.73 LSD from an E30 and a 3.45 LSD from an E23, easily swapped in case I feel like changing the ratio. These are also $80 LSD's from my local boneyard.
Another benefit from the swap is the availability of aftermarket springs for the E28 and E24 to go with the adjustable height Bilsteins. This allows you to readily adjust the rear height of the car. Again, fortune has smiled on me as I have found two sets of these springs and shocks in local boneyards for very little cash. I also found that you can use the E28 upper shock mount using the holes for the E3 mount. The E28 mount has fewer things to go wrong and is easier to find.
I've had this rear axle in for several years and my driving impressions are that it doesn't have the waddle in the corner exit my E3 used to have, and the LSD gives me power to both wheels.
I drive my car as a daily driver and parts availability is important to me. By upgrading to a mid-80's suspension I greatly increase my chances of finding replacement parts in my local boneyard. The last E3 I saw in a boneyard was about 3 years ago in Windsor, but there are E28's everywhere.
I would imagine that you could sell the stock parts to guys who want to stay stock and recoup a great deal of the cost of the swap.
To summarize the benefits:
1. low cost LSD in various ratios
2. more parts available locally
3. better rear brakes - 284x10 compared to 272x10
4. better springs and adjustable shocks
5. better handling
6. talking shit at Cars and Coffee...
Here's the article on Bill Arnold's car: