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I'd change the fuel filter and being it's an early M20 that still has a distributer on the side vs the later M20b23 and b25 which used the camshaft distributer setup. I would do a cap and rotor. but keep the originals as spares.
When I was living in Bitburg I had a 82 320i then a 86 M-Tech 1 Sadly the early cars had drums but a simple swap of rear trailing arms gave you disc brakes.
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