While its taken a while, I've finally replaced every suspension component with an OEM replacement part to refresh the feeling of the car back to that new feeling.
My E36 finally feels just right, if I think back to how it once was it sure is night and day compared to when I first picked it up, and it was relatively tidy to start with back in 2009 when it had 175,000kms. As of 2014 at 209,000kms Everything is tight and direct, very predictable. Changing the stock E36 to M3 parts is no doubt one of the best upgrades you can do.
The whole front has had an M3 EVO upgrade, all original parts such as Lemforder, the only part I haven't replaced is the steering rack which has not yet given any grief. The addition of an M3 cross-brace has also sharpened up the front turn in feel.
The rear suspension was the weak link for too long, so this year I stripped the old subframe off, installed M3 reinforcement plates and rebuilt a 328i Manual rear suspension assembly with 17 brand new bushes/links and finished it off with a replacement LSD running a 4.27 gear ratio. For the first time it grips and goes without any fuss or strange behaviour.
While a costly exercise (eye watering) it's been an excellent learning curve and I now have a car that rides and drives like it should. If anyone has a BMW they plan to keep for a long time / never sell I strongly recommend giving your pride and joy a suspension overhaul.