Interestingly enough, I have a friend with a similar 3.0 and he says he's seen "low coolant" messages on his. He's in Toronto this week - we'll GTG later and see what he has. Same dash at any rate.

The sensor itself is just a little reed relay that (probably) opens when the level is high enough. There's a ring magnet on the float.

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'04 X5 3.0 5AT with 300,000+km - Black
'08 535xi 6AT with 290,000+km - Titanium Silver