I changed my diff from 3.46 open to 3.64 LSD on my last 535. Best thing I ever did for that car. I also chipped with Conforti Chip. Second best thing. I think you need a few more replies to make your decision. I would certainly chip it however. Cheap and easy. Diff is a good days work unless you have a lift available or pay for the R&R.
Mike Holbrook
Meridian, Idaho
1992 535im, 17", Euro M5 Throwing Stars 8's & 9's, FK-451 235/45s & 255/40s, M5 Sway Bars 25/20, Conforti chip, Lowes Ram Air, glass sunroof