So folks, quick update:
http://www.finetuningperformance.com/ took my car and ran all sorts of tests. They said the compression is great, the motor mechanically has no issues. Most important, they took a bore scope to the engine and did not see the same "cracked engine block" that
http://www.precisionmotorworks.net/ claimed to see.
The good guys at finetuning also said they did not experience the same overheating issue that Precision claimed. I'd like to believe the folks at Precision have better intentions, but it appears they were trying to pull a fast one on me and take my money.
I sincerely appreciate the outreach and support from everyone on here. The help and suggestions of 318ti.org members, are the reasons I stuck with it and ended up going to finetuning.
For now I am going to keep the car and start modifying suspension, brakes, tires with some track days in mind. I already bought 17inch M3 wheels off another member south of Seattle (Bothell...) who was a great guy (it was cool to meet him and talk ti's for about an hour or so). I'll keep you posted with pics as I progress in my ti experience !!
-Marc