No problem, there are more details and pictures in my project thread. Yes, I just cut the tube off and welded the ends that hold the bushings on a bigger diameter tube. I made them adjustable too by welding on a threaded section on the end (2 M16 nuts on top of each other
) and on the bushing bit I welded an M16 screw. Should hold up fine and it'll give you more adjustability when lowered.
As for the diff I used, mine came off of an E36 525 Diesel and those were definitely not available in the US/Canada. I use a medium case diff (so with a 188mm ring gear) with factory LSD. Afaik in the U.S. they range from 2.79:1 all the way to 4.45:1. They can handle serious power too (upwards of 800Nm, depending on ratio) and are a lot cheaper than the large case diffs (the 210mm ring gear ones). All the medium case diff stuff is interchangeable, the only thing that differs between the different models of BMW are the mounting points. That's the reason I went with an E36 one, as it has these 2 big mounting points on the diff cover. The only thing you'd need to order is a set of axle flanges/shafts from a manual transmission 535i, as BMW used 4 different types on these things. I got mine here for 45 dollars:
https://ebay.us/xZOYyI. It's type A in that picture you need. The Volvo axles are the same as those. That is basically the flange from the large case diffs, but for the medium case diff. Swapping them takes just a few seconds, as they just pop right out. But if you can find a large case diff in the ratio you want for not too much money, that is the strongest. You can recognize them by the amount of bolts that hold on the round cover things that hold the seals on the sides. The small case diff (160somethingmm ring gear) has 4 bolts there, the medium case ones have 6 and the large have 8. The large diffs come on almost all of the older M cars and V8-V12 models. Usually only the M cars had LSDs though.