First, your care would have come with the MKII unit, not a MKI unit. BMW discontinued the MKI around 9/1997.

Second, the MKIII is definitely plug-and-play compatible with your car. Dozens of folks have upgraded from MKII computers to MKIII and MKIV computers.

All that said, the diagnosis is correct. You probably have a dead MKII computer. When the nav computer dies, your radio, if you have DSP, will shut off after 30 seconds or so, because the DSP amp can not find the nav computer. (The two are co-dependent in nav-equipped cars.)

Also, I suspect that the MKIII you got is dead too. If you can not get the screen to come up with the MKIII installed, then it may have croaked. Did you try a different OS upgrade?

Lastly, do you have the Television option on the main menu of your screen? If so, try disconnecting the nav computer entirely and see if the system works. You may have to reroute the blue plug formerly connected to the nav computer and connect that into your TV/Video module to do this test.

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SOLD
2000 E38 750iL Highline Edition, Upgraded with the lastest 2006 X5 Electronics
MKIV Navigation, 16:9 Display, Bluetooth, TV/Video with Backup Camera, Sirius, and Aux Input