You can replace the rubber bushings on the shifter plate, and the little Orange sponge inside the linkage that connects the selector rod to the tranny. Also check to make sure the shift plate isn't actually broken as that will also cause sloppy shifting. with minimal mods you can install a Z3 shifter in there and a new shift knob and get a tight budget short shifter.
1981 BMW 323i Baur #3023/4595 M20 2.7 L swap and lots of other stuff. - summer fun car
Winner of the longest drive ever to Bimmerfest in 2010.