That shaft goes deep into the transmission. Give these guys a call:
Bavarian Autosports
602-254-7380
Ask for Andrew or Ray. Andrew is the owner. They rebuilt my tranny a couple of years ago and they did a good job. I have the exact same car as you. They are the best, most honest and knowledgable and helpful shop around for BMW's. I've been screwed by most other BMW shops in Phoenix.
These guys know more about BMW's than any shop I've run across.
Good luck.
JD