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Old 12-12-2021, 06:37 PM
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Was watching a video on a 2001 E39 (manual 4.4 V8) which has a similar problem with the alternator light. The video features a few takes at Fluid Motor Union in Chicago and the owner of FMU (a very capable wrencher who has an e53 off-roader) opines it might well be the oil level sensor or the wiring to the OLS. IIRC he mentions that the OLS interfaces with the CAN-bus.

On the V8 the wiring for the OLS runs from the passenger-side wiring box atop the engine along the front of the engine all the way down to below the sump. That is 3-4 feet of wire in an awkward location and easily damaged. I'm not at alll sure that the wiring location on the M57 engine is the same but, since the electronics on the e53 and e39 are close cousins, it might be worth checking?
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