You have to love those crazy Bavarians. From BMW's service literature on replacing the head gasket in an E36: "Clean sealing faces of cylinder head and crankcase; if necessary, remove traces of sealing compound with hardwood spatula." Seriously -- how many other auto manufacturers would think to advise the use of a hardwood tool for anything? This says a lot about BMW's emphasis on proper assembly and maintenance technique, especially where the critical head gasket is concerned.
BMW's straight-six engines are world-renowned for their sewing-machine smoothness. So, any kind of misfire resulting from a blown head gasket will prove more immediately noticeable on a BMW straight-six than on most other engines. If all is running well, you'll almost never feel a modern Bimmer straight-six at work; as such, even feeling the engine running at idle or under hard acceleration is generally an indication that something has gone wrong. And you should notice a difference in acceleration, particularly at high rpm where the BMW engine usually does its best work.
The cylinder-head-to-block interface is one of the few places in your engine where the coolant, fuel, oil and exhaust can all come into contact. Depending on where the head gasket blew, you may get all kinds of fluid crossovers. Coolant emulsified in the oil will turn it into something resembling chocolate milk, and oil in the coolant will float to the top and form a rainbow-colored slick. Gases leaking into the crankcase will cause a puffing exhalation from the oil-fill cap with an accompanying raw fuel odor.
On an E36 straight-six, the cylinder head deck isn't shot through with coolant passages as it would be on most other engines. Instead, the Bimmer engine's primary coolant passages are at the front and the back of the block. So, if the head gasket blows out around a coolant passage, water is only likely to go into cylinders one or six. Pull the spark plugs on the engine and very closely examine the plugs from the end cylinders. If one of them seems noticeably cleaner or newer than the others, it's because they've been steam cleaned by the leaking coolant.
Depending on where it blows, a blown gasket can cause overheating and coolant loss, as well as excessive oil consumption and colored smoke coming from the exhaust pipe. Gray, blue or black smoke and an odor of antifreeze or raw fuel are all indicators of a blown gasket. But you may get none of this, depending on the blowout location. In those cases, you'll only experience a loss of power, some engine roughness and a check-engine light. Checking the codes, you'll almost certainly see at least one misfire code stored in the computer. It won't be a random misfire code; instead, you'll likely see misfire codes for either a single cylinder or two adjacent cylinders.
