Differential Speed Sensor Broke
I took my '85 535i on a very spirited drive with the local BMW CCA chapter over the weekend, during which my speedo stopped working. When I arrived at our destination shortly thereafter, I did a cursory check of the electrical connector (tight) and rolled fore / aft a bit to ensure there were no noises coming from the diff (silent). Everything else was working fine, so I assumed maybe it was a problem with wiring or a fault in the cluster and drove home without issue.
A few hours later, I noticed a small puddle of Red Line under the diff (eff....) and pulled the speed sensor: One of its two prongs is broken off and the body is cracked. I can't really tell for sure where the oil is coming from, but the bolts securing the cover are all tight and the RTV seal looks good, so I suspect it's leaking round the compromised sensor. The diff was bone dry and clean as a whistle before this.
I'm hoping (foolishly no doubt) that the reluctor ring just flexed slightly under hard cornering, smashed the plastic sensor, and that I can drain the oil, fish out the pulverized bits of speed sensor, and throw in a new one? Has anyone ever had one of these break without the diff itself being the problem? It seems more likely that there's some slop / play internally that needs to be addressed :/
The PO had a bunch of issues with the diff (it's an LSD BTW), and ultimately had it completely rebuilt a couple of years ago. Worried I'm headed back down that same road...