Hi. Welcome to 2002. Yes, a B4 rear diff fits. But as you've come to realize, the ratio doesn't jive with the 01E. But you could always retrofit an 016 transmission from a typ44 or a typ85 into your B5 (and by doing so also add a locking center diff), but lose 6th gear. And you'd need a different propshaft.
I won't even get into the rare Porsche 944 locking differential discussion. There's passion, then there's dementia. Kind of like putting multi-piston fixed calipers on the rear of a B5... The kids who never paid attention in physics class and/or think the earth is flat get super screechy when you point out their obvious shortcomings by mentioning the monoblocs on their rear axles. But I digress...
The point is this has all been discussed and experimented with and tinkered with and parts catalogs searched and rare ROW parts tracked down (or found out something listed was never even manufactured) over the last 20 years. Sadly the the internet seems to have forgotten so much of what the collective had learned, and many of the players from back in the day aren't around anymore, either spiritually or physically.
If the question is "B5 S4?", the answer is usually this: It's either been done before and the results were bad/poor/meh/whatever and everyone dropped it; OR it was attempted and it was decided it was not doable or would not work or just not worth the time/effort/expense...
There is a third answer, however, which brings us to today. You have the benefit of 20+ years of experience of those previously mentioned pioneers and veterans on your side, even if you can't go back and read their posts and experience their successes and failures. The products that are available today are the result of that trial and error and those starts and stops. You don't even have to get your fingernails dirty if you don't want to. You can order a Wavetrac or JHM from the comfort of your home and know it's going to work. If a physical locker had actually worked really well, and there was enough of a supply of used parts or NOS stuff for multitudes to do the upgrade, you would be seeing retailers selling those kits today, or old guys like me who hoarded the good stuff back then selling off a little here and there.
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