It had obviously been welded before, and not very well. Took a while to file down the slopping welding so the fix kit would fit (this is an awesome fix btw, highly recommended). Unfortunately this didn't fix the pulsing in the steering or the rattle on accelleration. Fortunately I think I've found an e28 guru who should be able to come over this week to help me diagnose some of the issues.
There is a good chance the head gasket has gone, as I notice a little milky-ness in the oil, though this could be due to condensation, we'll see.
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