Update: We have spoken with our sources and there is DEFINITELY going to be a twin-turbo 4 Cylinder. They are of course trying to push for 11k Rev, but more testing needs to be done.
We have been hearing from two independent sources that BMW is going to build a 4-Cylinder High Rev (11,000 rev limiter) engine, hoping for about 220-260 horsepower. The 4-Cylinder will be offered in 2 stages with and without twin-turbos.
We hear that the new engine will be exclusive for the 1 Series to start, but may go to a 3 coupe, but not the sedan. Release date of 2010 is what we hear they are shooting for. Parts and pieces (suppliers) are being scouted now.
Continuing down the rumors path, same sources indicate that a quad-turbo 4-Cylinder might be in works as well.