Last August Autoblog went public with a story about a diesel version of the M5. The problem was that the story was more about reading between the lines than directly quoting anyone at M. Because of that, M immediately denied making the statement and asked Autoblog to revise their story. And in this case M was right as I was actually there and heard what was said. But then again Autoblog was right to sense that there was something M was being coy about.

Now that “something ” has shown up in yet another place. Last summer we first told you M potentially getting more involved in diesel power plants. Now has found not only evidence of a M550 model but also the output figures of it ‘s try-turbo inline six; 381 hp and 516 lb-ft.

According to our sources the engine will also show up in the refreshed X6 (debuting this winter) and the 6 Series Gran Coupe. But the real interesting story to us is that M has actually been involved with the development of this power plant. BMW M has always been known as the master of petrol performance and has rarely ever (if ever) dabbled in diesel. Alpina, has produced and continues to produce some legendary diesel engines and of course Audi and Peugeot have had storied race careers with oil burners. M getting into the diesel business is big news, whether it ever leads to a pure M diesel or not.

BMW 1 Series Performance Studie

The other rumor that ‘s recently surfaced (via is the M135i. Wait… what about the 1M you say? Is there room for a model between the 300 hp 135i and a potential future 350 hp 1M? Let ‘s go back a few years to the release of the 135i. Back then the original idea was to make the 135i in the US, the first “is ” model. Something obviously changed and we ended up with a wonderful 300 hp 135i with no special moniker. But the idea of creating something for a younger demographic with touches of M (without the full treatment and associated cost) wasn ‘t forgotten. That ‘s what makes the rumor of a M135i somewhat realistic in our eyes. With a tuned 320 hp N55 inline six (basically the same technical set-up as in the 640i and 740i) BMW could quite easily tweak the next generation 135i and sell it for a premium.

We also know that the 1M has proved far more successful than expected. BMW and M likely want to capitalize on that success by offering something sooner rather than later. The later of course is the much rumored M2 (aka the next generation 1M) that likely won ‘t hit showrooms until late 2013 at the very earliest.

Look for the M135i (the name is still TBA apparently) as soon as next summer in five door hatch form. In the US it ‘s unclear if we ‘ll get such a car but rest assured it ‘ll be in the form of a coupe or convertible as there are no plans for the five door and three door hatch to ever make it to the US market. We expect the same can be said for the Canadian market as well.