Stephen, thank you for the explanation. The part in the first pic of your first post is what I ordered today. Both the parts rep and I agreed that the valve could not travel all the way from the pump, through the filter housing and into the filter. However, we were just using common sense and not any actual solid technical analysis based on the internals of the pump. Your input confirms our thoughts though.

Would you know how much work involves replacing the filter housing unit only by any chance?

As for your second post, that's the first thing I saw when googling about this issue, and the reason why I'm getting serious doubts about where this valve actually sits. The report says "oil pump" which didn't make sense to me and hence why I assumed they changed the whole unit at once (both pump and housing).

If the 200$ part fixes the problem without any major work then I'm all for it, better 200 now than a few thousands later down the road. If it's the pump then I'm stuck...I cannot do such a big job where I live as I have no access to lifts nor a garage. I will have to park the X long term until I find a solution. I'll investigate the oil in the filter to start with at least....

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BMW X5 E53, 4.8iS - 2005
Professional Stereo/Nav with DSP (modified BM54 module) - Converted to Eonon GA5166X with Reverse cam
4-Corner Air Suspension - Converted to BC Coilovers