these links should explain the oil separator
oil consumption is due to failure of the diaphragm at the rear of the manifold . diagnosing and replacement shown on the video for a 7 series but same engine .

you can fix it and clean out the manifold whilst you are replacing the valley pan gasket .

http://www.xoutpost.com/bmw-sav-foru...ve-issues.html

How to change a dead OSV on a BMW E38 7 Series with an M62 V8 4.4L engine. - YouTube