Getting it scanned is usually free at most auto parts stores. I like to recommend that because it can give you a good base of where to start. In the E34/39/60 section I have posted the link to a copy of the Bentley Service manual which has an excellent troubleshooting and diagnostic guide. They are very handy.
As for the issue with the oil light i have to say I have never herd of that happening and I'm not sure why it's doing it.