well I can offer you this info. It would be about 500 for a limited slip diff (OBX) and about $400 for a Valeo clutch kit. It is about $1200 for labor at helix for it all installed then maybe another $100 for misc parts and fluids. So about $2100 :( a used tranny starts about the same price then installation

Are you sure it's the diff? How are you sure the sound is from the trans? When does it happen/ when do you hear it? Have you had it diagnosed by a mechanic? Had a second opinion? Could it be an axle? (That'd be much better news, or at least less bad!)

I am not an expert, but I had a diff go in my R53 (six speed Getrag). It ovalized and the axle popped right out. There were no signs of it going bad. i would think if a gear in the diff is busted, it'd stop working altogether?

If you are sure it's the diff, I'd be nervous to keep driving -- weather it's busted or it's just some broken teeth, broken bits of metal may be floating throughout your gearbox. There should be a magnet in the case to catch them, but it may not be big enough, or catch them soon enough.

After researching for myself, I decided not to go with an OBX. Too many people complain about them not lasting. Way from Way Motor Works in GA recommended a used JCW lsd. I wound up buying a used stock open diff on NAM for $30. Don't know if any of this is valid for the R50 five speed trans, though.

Also, parts and advice on rebuilding the Getrag trans from the R53 were hard to find (I had trouble, anyway). BMW doesn't sell any internal trans parts. I found a company in the UK that sold parts, can't remember their name, but I am sure the google can assist you in finding them. Again, not sure if it's the same situation for your trans.

If you have it repaired, I think doing the clutch at the same time is a great idea. I got a Valeo single mass clutch kit and flywheel (stock for the R53 in dual mass) and I like it. Stock clutch was LUK, and for me was in great shape at almost 200k, so if I hadn't already bought the clutch kit I maybe wouldn't have replaced it.

MY (not expert) ADVICE:
Get an expert opinion, or two.
If you do wind up hiring someone to rebuild it, I would be prepared for them to tell you they can't get parts or something. What I mean to say is, I wouldn't hire someone to take the trans out if you can't afford to buy yourself an entire used transmission (if you need a whole trans, they have a few Minis at Kubis in Auburn -- the trans isn't too big or heavy you can put in in a trunk).

Update on the car's status: took the car to continental transmissions to have them take a look after hearing good reviews about them, so they could open it up and take a look. The differential was beyond being able to be rebuilt, so I now have a new clutch and brand new diff for a grand total of $2600. A repair that would have cost me $200 in my Dodge Dakota, but high repair bills are the price you pay when driving a mini

Man that stinks. Glad to hear it got done. And honestly, after doing mine myself, 2600 doesn't seem unreasonable. It's quite a bit of work.

 

Also, if anyone else is doing research and stumbles across this post, here is a great how-to on replacing the diff in an R53: http://lyle.smu.edu/rcam/cpm3v/miniclutch/miniclutch01.htm