Blown Head Gasket?

Your temperature indicator should never move past the 12 o'clock position at all. Not even by a hair.

I've been reading all the responses to the posts above and it's not uncommon for these cars to crack the heads. Reason being because the cooling system fails at close to 95k miles. The heads are made of an impure aluminum that doesn't withstand the heat as much as a purer aluminum would. That's just the reason why it's so common to see these heads crack. If the cooling system is kept in tip-top shape, these heads will run forever.
That said, and here comes a shameless plug, we have a machine shop that deals specifically in BMW and we would be happy to give any advice that may be needed.
My primary reason for mentioning this here is because it's sad how often a machine shop gets a BMW head to recondition and they end up junking it. Why? Apart from the common mistake of resurfacing before having pressure tested only to find it's cracked and now too thin to resurface again, not every machine shop realizes that BMW is the ONLY car in the world whose heads have a very fine tolerance for how much can be machined off of them. They can only have .012" machined before they become undersized and in need of a thicker gasket. From there, they only have another 0.012" before they're junk. Shops don't realize this and machine too much to begin with (without having straightened the heads prior to skimming) and go from an original thickness head to a junk head in under 5 minutes.
So, please, if it ever does turn out to be a cracked head, be sure you know the shop you're dealing with is aware of what kind of tolerances these heads need to remain within.
If you want advice, you can check out www.autoheadperformance.com and call with questions. We're happy to answer questions before you take your head to a machine shop.
Do your research beforehand and ask the shop you're using questions, you won't regret it

Sheldon

I think it has less to do with the heads being made of impure aluminum, but rather it's just that they are made of aluminum in the first place. Any aluminum head is going to suffer serious consequences if overheated, but thanks for the heads-up (pun intended) about not shaving too much off.

Sorry about that, I didn't word it correctly. When I mentioned a less pure aluminum, I was intending to state that as the reason why the heads crack so soon. Aluminum is aluminum and it will crack, but the quality of aluminum is responsible for the heads cracking without much warning. Usually noticing the temp guage in time when it reaches boiling will give a SMALL window to save the head, but with this case, the temp guage is already too late of a warning.

I guess, in short, I meant to say the quality aluminum is less resilient against the heat.

Sorry about the confusion.

Update:
I decided to just post this follow up in case anyone was having a mystery air bubble problem. Mine turned out to be a blown head gasket. This was apparent by the sludge on the oil fill cap and also by the cooling system overpressure after about 30 seconds of idling with the car still cold. One morning i started it up and moved it out of the garage. i cut the car off and removed the rad cap. The coolant gushed out like a geyser. My fan was not turning on because the exhaust gasses were creating an air bubble which would migrate to the radiator. The coolant level would go down past the fan switch and not turn it on.
Anyway I removed the head and took it to Scott's machine shop in Fayettvile Ga. He measured it and found it to be .010 warped. He checked for cracks too. I had him mill it and I used the gasket kit from pelican to re-assemble the engine. I bleed the system again and test drove it today. So far everything is fixed. No overpressure, no overheating and the aux fan comes on when its supposed to. Also worth noting, The #2 piston was clean while #s 1,3,and4 were coated in carbon. I assume the #2 was "steamed" when the car was shut off while hot. This might be yet another way to diagnose a cracked head or blown HG. I think I'm under $500 total on the head gasket job.

Originally Posted by twitchit72

I assume the #2 was "steamed" when the car was shut off while hot.

Most likely. It had probably began getting steamed clean as soon as the gasket became compromised.

Originally Posted by twitchit72

I think I'm under $500 total on the head gasket job.

Not bad! Thanks for posting an update.

Hi Mott would you happen to know why my 325is BMW wont turn on unless I give it a lil gas. But the car starts shacking and it won't stay on. While I try to keep it on the engine makes a popping noise.

Now 1012 and I think my head gasket needs done, no milk, no differcult start, just a loss of coolant, 250ml a day any thuoghts will be greatly welcome

I've seen milky oil filler caps in a 01 VW Jetta, 2 separate E36's, and a 01 Ford sport trac. All just from doing short tips in cold weather, no blow HG's. When the dip stick looks milky, then you got a problem.

Also, coolant loss could be leaking hose or a HG leaking externally, etc. Unless you are getting that milky substance on your dip stick then you're fine. Do a compression test and/or leakdown test if you'd like, because it will let you know before you're dipstick gets milky, because once it is the water in your oil could have damaged the main bearings and such.

As Jokobie mentioned, doing a compression test or leakdown will help diagnose it before pulling the head. You can borrow tools from Autozone, etc that allow you to pressurize the radiator and see if the system pressure drops gradually - telling you there's a leak somewhere.
250ml daily is a lot of coolant and signifies something is wrong, but check those tests for peace of mind before doing anything. If you do end up pulling the heads, you can do a visual check for cracks yourself before sending it in for testing. The cracks most often occur from an exhaust seat to the water jacket closest to it. Sometime between an exhaust and intake seat, but it's rare. Hopefully that helps diagnose the problem, but do get it looked at soon because the temp gauge isn't much warning before it's too late.
Best of luck!