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I think I found my water problem. Combination of dirt built up under the blower + a crap gasket + the car being parked up hill. So I let everything dry out and cleaned it up, now I'm going to put some silicone around that gasket and hopefully it solves the issue.
Picked up a nice e36 m3 this weekend, runs and drives! Will be taking everything for the swap and selling the rest. Do need a ZF trans if anyone has an extra.
Also got my carpet out and power washed it, dye on order. Had a 3.73 lsd dropped off by another forum member as well, just need to paint it and put some fluid in.
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