Anything is possible, not easy but possible. There are two options that you could examin, in my opinion. The first would be a front engined rear wheel drive Mk2. The obvious problems with this are space (not sure if the v8 will fit between the bulkhead and the grill), layout (the Mk2 is designed for a transverse front wheel drive not a longditudinal rear wheel drive), and the rear suspension (beam not indipendant). All of these could be solved, by using a spaceframe chassis for example, but not easilly or cheaply. The second option would be to make a mid-engine rear wheel drive Mk2. This has been done in the past, although not with a BMW engine to my knolledge, and so is achievable. It would require a new subframe to be manufactured to take the engine and gearbox and then welded into the car. Again this iis not easy, quick or cheap to do.
So inessence it is possible IF you have deep enough pockets, or sufficicent skills and access to the correct machines. One thing is certain, it will not be quick or easy to do.
