Hey Z, I don't know $hit about the US M3 versions -I know they are different than Euros. Beating a car in the track depends on a lot of factors and its very difficult to do a fair comparison. Leaving aside unfortunate cases like MD, where he has to pit every lap or so due to natural causes, you have to consider engine, suspension, brakes etc and last but not least, the DRIVER. We are NOT all in the same class. As I said, some of us use stopwatches for lap times, and some Oz Alfa owners make do with calendars.
On the question of your engine choice, my pick would be the 1.8T. Why a 2liter? Find a 1800 engine (Alfetta) and turn it into 1.8T. You only need few additional parts, even fewer if you can find a 75 1.8 injected engine. Build a good 1.8T and your M3 buddy will quit going to the track!
Jim K.