I've seen it a few times - never with engine rebuilds, but certainly with car maintenance items (brakes, suspension parts) that the owner has listed. A lot of shops count on the mark-up of the components.
Not interested in an online pissing contest - typically, I'd expect to need/plan to go one size up in piston size, and replace the valve seats and (at least) recut the valves. If you find the bores are good enough for just a hone and new rings then great. I just wouldn't count on it. In the (non-BMW) circles I've traveled, a re-ring, hone and bearings is not a "rebuild".
Pulling the motor apart, measuring cleaning and resealing is certainly much cheaper and easier. With any luck, you'll find that is sufficient on your motor, but once it's apart you may find things worse than you hope - hope for the best but plan for the worst.
1998 328i "M-tech"
2001 TDI Golf. 1300km/tank commuter. Boring, slow, cheap.
1991 P-car: 964c4 Let the porcupine jokes commence.
Gone: '99 M3 vert, '98 M3 sedan, '91 E30, '89 E30, '87 E30, '91 Euro M5, '93 6-speed Corvette, STI v8 swapped '98 Impreza, '73 2002, 2004 325iT
Last edited by njansenv; 12-27-2011 at 01:51 PM.