... I found the article in the August 2009 issue of Racecar Engineering. Here is the pertinent part:
One of the enduring stories regarding the M12/13 is that they were built around high mileage road car engines. The tale goes that the engineers discovered that blocks that had spent a long life racking up miles in road cars were wonderfully stress relieved. This gave a longer racing life under the extreme pressures of turbocharging. Reports claimed BMW's M Sport engineers were to be found frequenting Munich scrapyards to source well-used blocks from BMW saloons.
Ulrich Baretsky of Audi Motorsport worked on BMW's Formula 1 engines in the early 1980's and rolls his eyes at the suggestion: 'We kept being asked this' he recalls, 'and it wasn't true. But Paul Rosche became curious, so we tried it.' They built up an engine around an old road car block and tested it on the dyno to see what would happen. 'It didn't even get warm before it blew up,' recalls Baretzky.
Where the story came from, then, is obscured in the mists of time, but it was probably the work of an overzealous PR representative or a journalist letting his imagination run away with a snippet of information picked up during an interview. It was definitely not from spying on BMW engineers cruising Munich scrapyards.
So this has to be put in the bin alongside:
The fixed Tripoli Grand prix
The Mercedes paint scraping
Nuvolari turning his lights off to win the Mille Miglia
Hamilton and Rolt overcoming hangovers to win the 1953 Le Mans
Peter Collins handing the world championship to Fangio
Any more, folks?