Its ALIVE!
Well, it runs and drives at least. The 4 speed is unentertaining with super wide ratios, but the wagon is fun to drive as a manual vs. the automatic. Accelerates twice as fast, at least by my perception.
I decided to cut the springs some more to get the ride height down to a respectable level, since snow season should be over.
Cut an additional 3/4 coil off the front (B3 Passat) springs. Dropped it to a very good height - no more gap, but the tires are mis-sized. This means a total of 2 coils cut from these springs.
Cut 1 1/2 coils off the (uncut) rear BMW 633CSi E24 springs - but almost one full coil was a dead seating coil. Also brought it down to a no-gap height.

I threw on some cheapie 15x7 wheels I got from Justin for the LeMons Rabbit, but they have 195/55r15 tires - little to tall, but gives me a good idea of height and fit. The rears rub a bit, but fender lip rolling should solve it. WIth 195/50 or 45 series tires, should fit perfectly.

