Sorry to tell you but you bought the wrong diff. The 318 takes the 168mm diff same as the 1.9 Z3 which is lovingly known as the "small case" diff. All the other 3 series (e36) take the "large case (182mm) diff. Bottom line is that diff won't be legal, although the gears are all the same regardless of case size. You need to find a "small case " diff from a 1.9 Z3 or an e30 318. BTW, the Z3 diff requires an output flange change to work in your car. Very easy to do, just take a small pry bar and push them gently out, you wont even have to change the seals.
R