500whp and more importantly 500wtq is easily attainable with a thicker headgasket, turbo kit, and stock ecu. 2.8L m50b28.
Just my opionion, but I would've went with the 2.8L bmw 6 if availability and price were equal to an rb. easier build imo, more torque, and an arguably better transmission.
Is there much of a turbo e36 scene in australia? Its reasonably large here in NA.