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Hey,
Did it still have oil pressure before you started dismantling it?
That glitter thing is more from the aluminum U-guide and the timing cover( see the attached picture of the one from my X)
I would get a simple compression test on all the cylinders and if it shows good numbers go ahead and replace just the stuff is broken on the old engine.
It's the way I did with mine. Two years and 9000 kms later I only have a timing over advanced for both banks,which is a camshaft sensor wheel misalignment thing.Other than that.Runs as strong as a tank.
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e53 '00 4.4i Oxford Green II Freshly rebuilt tranny(2nd one) and transfer case/front shaft
e70 '08 3.0si Sapphire Black cinnamon leather 7 seats
e61 '06 530XI Sports Touring Silver - SOLD
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