[onewhippedpuppy]

Untrue Terry. The factory had a systematic method that they used to diagnose Nikasil issues, it was not a recall. They did, however, extend the factory warranty to X years (not sure) and 100,000 miles on the motor. The first step was to diagnose the problem. If the car shook at idle, and met their standard for a "Nikasil shake" they moved on to a leakdown test. Many Nikasil engines were replaced by overzealous service departments that were not Nikasil problems. The PCV plate and intake manifold gaskets have the same symptoms. I somewhere read an interview with one of the techs for a major BMW engine rebuilder (Bavarian Engine Exchange or similar), he stated that maybe 1/4 of the M60s that had "Nikasil problems" actually had cylinder wear. This was his experience with the engine cores that they received. Typically it was another issue with similar symptoms, and the shop just got carried away.

Sarc, cooling system is one I missed. Like most BMWs, the E34 likes a new radiator and waterpump at 100k-ish miles. Hoses are also suspect. If the car in question has not had a new radiator, water pump, and hoses, plan on replacing them.