That's not an unreasonable price, given all the work you've done on it, the low mileage and excellent presentation.
When I was looking for an X5, my preference was for the diesel variant. Sadly, all those I inspected didn't have the options I wanted, nor the colour combination, and were poorly presented with much higher mileage (almost all had the cream interior, which I simply couldn't have as it would soon become red given where I live). I ended up buying the '06 4.4 and I'm happy with the purchase although I have had to inject around $2K in maintenance & basic improvements thus far which brings my investment not far off what you're asking. E-53 diesels generally attract a premium of $2-3K over the V-8's and $4-5K over the 6 cylinders IMO. Some of the rubbish I saw at car dealers was a joke and 4 months later, they're still offered for sale.
The car market here in WA has crashed with a huge bang, due predominantly to the down-turn in the resources boom. You can see bogun rides for sale everywhere, along with jet-ski's, boats, camper-vans and more, all going cheap, cheap.... Next are the mortgagee sales....
Hope this is not the case for you over in the east!

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08/06 build 4.4i Stirling Grey over black