Hi everyone feelin some what sad and disapointed after all the hard work and money i put in to my e34 m5 3.8.
This is my story so far. I bought the car dec 2005 with no knowlege at all about m5s. Checked the car over could not find anything wrong with it other than no service history.
Started driving the car in feb 2006 replaced engine temp sensor,sparkplugs,ecu and one injector.
Drove the car for for about 2000k engine mis fired due to fouled spark plugs. The cylinders used to misfire in this order 2, 4, 6 and 5. The engine didnt look like it was burning oil but used to consume 2 US quarts or 2lts of every 600 k. Ocasinally i would see smoke on idle and the boot or trunk lid had black deposits on it can only be oil deposits.
I never got the chance to put the correct oil in the motor and i do feel a bit

Had the engine compresions checked twice little uneven but satisfactory. There was 155000 k on the clock.
The first oil grade i used was 15w 40 castrol magnatec then american SAE 5w 30 and SAE 10w 30 by USA castrol, all these the motor consumed. I started using 15w 40 cummins diesel engine oil because i could get it free.
I worked with a mechanic that worked at a BMW dealer back in late 80s early 90s he said he never worked on m5, but said they did suffer from valve stem oil stem problems so i replaced them using special tool from hazet was able to carry out this task with out taking the head off.
I suppose the replacement of these seals helped a little bit. The engine never leaked oil i might add.
Enough was enough and in march 2007 i removed the cylinder head, oil pan,piston and con rods. To be honest i thought i was going to find a melted piston. What i did find was very badly glazed cylinders 1-6 and some light scoring on the power stroke side of the cylinder 5, 2,4,6. The pistons all looked ok with exception to number 5 which looked like a small piece of metal had entered the combustion chamber causing light pitting on the crown.
In my mind i had found something, glazed cylinders so glazed that you couldnt even see any factory honing criss cross marks. So i fitted original piston rings and deglazed the cylinders using a brand new cylinder honing tool. I overhauled the head cleaning the valves. the guides in my opinon where serviceable and the valve seats where lapped in using grinding paste.
I replaced the big end shells rebuilt the engine. The engine runs great plenty of power very little m5 surge at low urban driving. No smoke when driving from mirror running the engine in with 15W40 mineral oil and not taking the engine over 5500rpm. The engine still is consuming oil at a alarming rate maybe more than before. The black deposites have started to reappear on the boot lid.
A new mechanic started with us two weeks ago, he was BMW trained and worked and serviced e34 including the m5 models and has been on a MSPORT training course. he looked and drove the car and said there was nothing wrong with the engine and that i had done a good job on it.He said i was "chasing my tail" by using the wrong oil in the engine he phoned someone in germany and they said the best all round oil was 10w40 fully sinthetic.
I spoke to another very expericed VW Audi Master Technician in London i used to work with and he said he knew somebody who totally rebuilt a diesel engine new rings new valves and guides everything replaced and it still smoked turned out it had a blocked breather (exsesive crankcase pressure). He also added engineering shops sell running in oil may be worth looking into.
I have done 800 k on the engine so far, scared its going to misfire when one of the plugs foul up. The air pump is unuasally noisey sucks good, the filter below the expansion tank is probably the original and looked a little blocked. I drove the car all day yesturday on and off german autobahn i even held i sheet of paper near the end tail pipe (muffler) guess what not one black mark showed up on it.
I have still more checks to do maybe break open the filter in the cam cover and check the charcoal filter canister.
Listen guys cuss me if you want i want your feed back
Rick Chapman