I have a 1995 E34 540 with an automatic, and it is exhibiting signs that I think might be related to a speed sensor failure. An auto transmission specialist I know says it could also be a problem with a check ball in the valve body.
I need another brain to think about this and come up with a theory.
When coasting along at 45 mph, if you give it some gas, it seems to either shift up then down suddenly, or the torque converter clutch is kicking in at the wrong time. I can't seem to tell which it's doing.
The second thing it does is when you approach a stop light, if you brake to a stop quickly, sometimes it will not shift down fast enough, and it will act like it's bogging down and going to die - just like a manual transmission car would die if you didn't push in the clutch at a stop light. If you gradually brake up to a light, it will shift down as expected.
The third thing it does is, if you're going down a steep hill, it will shift down and run the RPMs way up. It will continue to shift down until it's in 1st or 2nd gear (not sure how low of a gear it reaches). This makes going down any steep hill almost impossible without drastically affecting the speed of the traffic behind.
I have a PEAK code reader that is reporting a faulty 'speed control sensor' (or something like that). I have been told that there are three speed control sensors on the E34 540 - one in the engine bay somewhere, one in the instrument cluster (of all places!!), and one on/in the rear differential.
An auto transmission specialist here in Portland suggested getting a different transmission computer, which I did (off ebay), and see if the behavior changes - just to see if it's the computer that is faulty. Well, I put in a different computer, and it still does the 'shuttle shift' at 45 mph, but also does that incorrect down shift going down hills. So that behavior is different with the transmission computer I got off ebay. He was trying to determine if this transmission needs a valve body rebuild.
Has anyone had shifting problems with their 540 automatic like this??
I'm about to give up on troubleshooting this thing and sell it, but it's the most beautiful BMW body style of all I have ever seen - so I am torn.