Seems like a nightmare from which one cannot awaken. I won't dwell there, it isn't constructive.
My two cents:
Having a Z4M: For 20K you can just about buy a used Z4M. Maybe off by 5K, maybe 10K, but a well maintained one (heck, one with new rod bearings even) isn't going to be much more than 25k. And it's a literal turn key solution.
Engine: I'd consider the engine a total loss at this point. Maybe ok, maybe not, consider it gone.
My Preferred Option: Try to sell it "as is". Someone might want to put an S65 in it, a rocket motor, or a track toy engine. Recoup what you can. If you have a trusted party who can keep the car and deal with the transaction while you're deployed, this is a good option I think.
Part It Out: Tons of details, time, and headaches. It's only viable if you can DIY or have a shop and time to manage on selling piece by piece. That isn't going to be logistically possible for you at this point. We are back to sell as is.
New Engine: If you drop 10K into another engine, well, is three (or is it four) the charm? I'm not sure there's shop you can trust for the install and tuning. And then you're trying to manage this while deployed, car sits a year.
Thought Process: If you can recoup 10K, that plus the 20K get you into a used and well maintained Z4M when you're back from deployment. Or, that goes to putting a nice down payment on something much newer with a CPO warranty--maybe a flat 6 something or a V8 something.
Other Factors: Note that all of the above doesn't consider emotional attachments or sunk time/effort/dollars/emotion with the current car. On the other hand, it does let you end the final chapter of this horror novel, close it, and move on. That might be healthy. Only you can weigh and decide.