BMW Repair: Failed NOx Emissions in DC, nox emissions, supply hose

Question
I have a 1986 325es (VIN WBAAB6400G1221983)that has failed NOx emissions 4 times in the last month. DC only does Emissions testing now and you essentially have 2 - 20 day periods that include 3 inspections each to bring the car back into compliance and/or spend at minimum $855 and ask for a waiver. NOx readings (IM240) should be less than 3.0000 GPM, but my car has been running 3.8467, 3.1714, 3.5911 and 3.2144. All the other values are well within the passing range. But I also noticed that they are also well above the 2008 Emissions results which were less than 1.0000 for HC, CO, and NOx.

Anyway, this is the first time that my car has failed inspection more than once. In the past it has failed and I've had a tune up or replaced the O2 sensor and everything has come back yo normal. I only have until August 20th and 2 more inspections to get this puppy to pass. So far I have spent approx. $650.00 on repairs to include a tune up/BG induction flush and changing the O2 Sensor. I am close to the minimum for a waiver, but I really want to get this car to pass.

Below are some of the major repairs that have been done in the last year.
August 2010 - 02 Sensor
July 2010 - Tune up/bg induction flush/replacement of spark plugs
June 2010 - muffler, water pump, timing belt/anti freeze/oil service
March 2010 - engine fuel supply hose
June 2009 - catalytic converter

I am going to take my car in to my mechanic on Monday. I've been going to him for over 20 years, but he has said that everything is in working order and I had to make him change the O2 sensor eventhough he said it was doing its job. I don't know what specific emissions related repairs should be done. I asked the Tech at the inspection station, but he only told me a few things of which I have already done. I want to be smart about the next steps, so I would greatly appreciate any recommendations you can provide.

Thank you in advance for your assistance.
Sharon

Answer
I see that you have done alot of work keeping this car going.You have said tune up ,have you had the valves adjusted?I also see the catalytic converter,although you have replaced it,was it an aftermarket cat or was it from BMW.Even though you have replaced it I would be leaning towards that,I have seen new(aftermarket) cats fail.That is was reduces Nox.I know it isn't what you want to hear but I am thinking its the catalyic converter.