Hi all. I've been having an ongoing transmission problem in my GM trans in in my 325i. I wanted to make a post as my problem has finally been solved, and it has been a total nightmare to try and discern in the past year.
My car would have problems in 5th gear at low RPM (especially, but throughout 5th gear would have occasional problems) and the transmission would be 'hunting' for TC lockup. namely, the revs would bounce about a couple times by 1-200 RPM, and then go into limp mode. I had been to many, many transmission and indy shops, which led me to a bit of a problem. Most indy shops don't like to touch transmissions, esp auto ones. So they send you to their preferred transmission shop, where you inevitably get their 'bmw guy' who thinks because he had a BMW once that he's a guru for all transmissions, even though his was an early 90s/late 80s model. It was very very difficult to find a shop that knew what they were doing.
Moving along, I finally found one. To anyone in Florida that has transmission problems, Florida Transmission Repair off of US 441 in Orlando has been brilliant. I went to them and told them everything that I had done, and everything that I thought about the problem. They gave me what they thought from my explanation, in which they agreed with me that the TC was definitely at least the major issue. Within 24 hours they had a diagnosis for me, parts sourced, and a (somewhat high but still reasonable) quote. They had the trans and TC out of the car, and took the time to show me exactly where the problem was from. There was a seal in the TC that had worn and wasn't keeping optimal fluid pressure, thus causing the car to drop into limp mode due to the computer monitoring.
(Typical BMW, make everything mechanically sound, then use too much plastic/rubber LOL)
I don't have my car back just yet, so this isn't a 100% verified thing, but I have been informed that that is almost undoubtedly the source of my problems.
Moral of the story is that TC seals age with time, not mileage. I don't know if I have a strange uncommon problem, or if we'll see more of these as time goes on and these seals get older and more worn. But anyone suffering a p0735 and issues esp at the bottom of 5th gear, this could be your ticket. My transmission shifted perfectly fine through all gears, smoothly, no flaring.
If anyone has any questions for me, or that they'd like me to pass along to the shop, let me know here. They know their BMW ATs, and I know that's a bit of a dark art.