325 motor swap or rebuild?

Hi,
I did a search but didn't find what I was looking for.

I just purchased an 86 325es with almost 200,000 miles.
The previous owner claims it (the motor) knocks.
From his discription it sounds like he ran it low on oil.

Should I rebuild the motor or just swap it with a used one?
Where would the knocking be likely from, top or bottom end?
Whick motors will be a direct bolt in?

I know when I was in Germany a Buddy had a 520 with a 535 or 735 motor in it. I don't know who or how they did the swap. They may have changed the transmission too for all I know. That was quite a few years ago in a late 70s BMW.

Any hep is appreciated, Al

Lots of neat things going on out there if you have the checkbook for it.
Untill you check out the motor, maybe a teardown you might not know if you can rebuild. I always liked the idea of rebuilding, but friends of mine are all about putting something else in. Heck I found a web site that was showing a corvette v8 in an e36. Wow talk about some power for your trip....
Metric Motors I think can give you some ideas too.
Best of Luck.