Next task was to get the car smogged so I could get it registered. I was able to pass with flying colors after doing all the work to make it pass for sure.
Immediately after I passed the smog test I drove straight over to the fabrication shop to have the rear sub frame done as well as have the differential upgraded to 3.91 gears. A note on the Subframe is my car had started to show signs of spider cracks on both sides. The frame had not "completely cracked" but if I had not done the reinforce kit it would have eventually done so.
From what I have found the reason the frames are cracking is fatigue failures. Same issue with aircraft hulls and the pressure changes. The metal eventually begins to fracture with the constant pressurization and un-pressurization.
The fatigue part on a E46 m3 is the loading and unloading going around turns. This constant flexing causes the area to fail. Bad job by BMW not to beef this up as this is a performance car. Stiffer suspension only acerbates the issue faster. As the car has 59000 hard miles on it from back roads driving and being on CA roads I guess I am not surprised to know I would potently have the issue.
Last of the changes at this point in time was the 3.91 gears installed. These were an immediate change I could feel when driving the car home after all the work was done. I took an image of the old 3.61 stock gears for history sake.