So.... if there is nothing explicitly wrong with the head gasket you're best off to leave it alone. BMW's KSD lists the labor operation to R&R a M52tu headgasket at 14 hours.
Most independent repair shops operating at the top of the industry are going to:
1. Not entertain using customer supplied parts, let alone Victor Reinz ones
2. Likely going to have a labor hour multiplier (x1.5 is common) for working on old cars because:
2b. They are likely to encounter and be entitled to correct the shameful work of those before them.
2c. Labor times are developed on new virgin cars in a controlled environment. Your 24 year old 323i is neither.
With that said expect to pay upwards of 20 hours labor at the shops prevailing rate, plus legitimate OEM components, add to that whatever they find along the way that must be repaired to put the car back into service and not be an immediate EvEr SiNcE case. Expect many old parts to be unsuitable for reuse or to crumble regardless of the care taken. Every plastic part, every rubber part, should all be renewed while the head is off.
I would fully expect this job to run 6-8k once all requisite "while you're in there" stuff is rightly taken into consideration.
Long story short the car is mechanically totaled.
Option B would be to find a lower rung shop, that hasn't learned the perils of customer supplied parts yet, that charges a lower hourly rate, eats the time above and beyond the labor guide, and leaves the mechanic to bodge repair whatever he can to mitigate having to call you for an umpteenth time about xyz part that just failed when they squinted at it too long.
Option C is what most people with these cars are going to fall into.
Watch YouTube videos, buy or borrow the tools you need, and learn to work on the car yourself. This avenue is usually the cheapest, but sometimes depending on the learning curve and your level of talent you may end up paying twice to get it done right the third time.
