Clutch/transmission issues

I have an 88 528e and i've got an idea but can't be certain what im dealing with here. the shifter seems to be stuck in third or maybe half in. Either way the shifter is practically immobile and the clutch is not disengaging the transmission, but when i release the clutch its not in gear, just idles. the clutch has always made noise for the 18,000 miles ive been driving it, a sort of almost grindy sound when the clutch is out and it's idling that sounds like the plate catching a little. however i'm thinking possibly shifter cables since the shifter is basically immobilized. Ideas?

You could have any number of problems: bad throwout bearing, trans input shaft bearing, worn shifter bushings, etc. I think you probably need to pull the trans and clutch assembly. Good luck.