They are a pig to bleed no doubt but mine was a scrap block after a head change where the fucking mong that did it never noticed it had a hairline crack (was the earlier motor though).
I put a 325 m50 in it,simple conversion only difference is the lambda sensor is zirconia instead of Titania and needs swapping.
Did you remember to put the heaters on hot before you filled the system and had the ignition switch set to batt lights/oil light on but not running?
That makes sure the matrix is filled as well.
They take 11.5 litres of coolant and bleeding can be a complete nightmare,I had the same issue on the 325 motor but I've done it so many times now it's quite easy,make sure you put slightly less coolant in than needed,say 10 litres as often there's coolant hidden in pipes etc,I mean I swapped the whole motor on both cars,drained nearly a bucket of coolant,went to til the motor right back to fit it and about another 4 litres poured out!!!!

To bleed it,put in about 6/7 litres of coolant with the bleed screw off,make sure heaters are as above,coolant cap on the fire up the beast and let it get to about halfway,you should feel the coolant into the right hand pipe to the thermostat getting very hot then the left pipe should start to heat up as the thermostat opens.
You'll need to have kept the bleedscrew on loose and chances are by now it will be like a boiling kettle,so be careful but let the steam boil off,it will take what seems like forever.
Your temp should be staying around halfway throughout this.
Once it starts showing signs of just bubbles coming out of the screw,tighten it back up and check your fill level,chances are its down a bit so top it up a bit,about a litre or so.
Get back in the car and check your temp and heaters,my guess is they'll be cold or very poor.
There's a good chance it's still full of air so rev it to about 3000 and hold it there,shove your heaters up to demist and they should start getting very hot,let the revs drop to idle and they should stay as warm,if not,carry on adding water and try again.
Once their good on idle,leave it run a bit and try the bleedscrew again,my guess is it will still be spitting a bit of air out,it may still be hot so be careful.
Leave the screw off and rev it from the manifold,you should see coolant flowing through the screw as well.
By now I'd switch it off and leave it cool for a bit,leave the screw off for now.
Go and check a few hours later,I'll guess the level will be pretty low.
Top it to the right level,let it bleed out through the screw as well then put the screw back on and go for a drive,everything fingers crossed will be ok but as another precaution when you get home,leave it cool,leave the cap off overnight to expell any more trapped air and as stated above hopefully your good to go.
Failing that you'll be looking at engine work and very rare do you find a good second hand 2.8 lump,well I couldn't for a price worth paying plus the fear is always that it won't be long before it goes again.
I couldn't be bothered with that again so spent £350 on a running 325i auto with tax and test,used it for 6 months,pulled the bits I wanted,sold the rest for £150 plus kept a few nice buts like m3 lights etc so the car stood me £200.
Also my rad was fubared and the 328 needed a new starter,alternator and battery which the donor supplied so effectively a free conversion.
Plus if the head gasket goes on this then I know it's just a skim and new gasket while the iron block is unnaffected.
Just a thought.