Sorry to hear your bad news . . . can't say I am that surprised based on symptoms. Did you get a professional diagnosis, or is this your speculation?
As DC said, parting it out is not really fun, it's work. Dealing with the shipping alone is a PITA. If you are handy and have the tools and time, you can get some cash. Will you get more than what you'd pay to replace the tranny? Unknown. But the parts are used.
It is a tough call. If you've just sunk thousands of dollars into the car, then it may be worth it. You might, MIGHT be able to find another touring (this time get a manual!) for, say, $5-8k. But it's going to have the same or greater mileage than you have, and you won't really know its history. With your car, at least you know what's been done.
Once a car is old enough, you get to the point where it's not really about whether it's "worth it" (in terms of the cost of the parts versus the actual value of the car) but how much you enjoy the car...and how much you'd have to pay to buy another car you also enjoy. I do think you can do way better than $4k for a transmission. That is a lot. See Joe's post. But you need to be careful with used transmissions.
2001 530 Steel Blue Metallic, purchased Dec 03
SP/PP/CWP/Slushbox (I know I know)
OEM M5 bumper, 40% Huper Optik ceramic tint, Dice Silverline Pro iPod adapter, 540SP radial spokes, Zimmerman Z-Coat rotors w/ Hawk HPS pads
"Mods": driveshaft, cooling system, Vanos, CCV, PSR, VCG, FSU, spark plugs, buncha belts-n-hoses, & other things I'd just as soon forget
BMW CCA member for 15 years
Last edited by Josh P.; 07-20-2011 at 02:12 PM.