This is the very first time I saw anyone with documented evidence that their Nikasil was shot. Heard of it a few times but never withessed any regulars to have any problems. I am still not sure cause I know you can take a brand new running engine, flood it out with fuel and it will be like an open hole with any pressure in the cylinders. Are they trying to sell you an engine? Mann... replacement is the next best option for you and I think with enough hammering BMWNA might give in because of the mileage issue. I still cant see the engine being that bad if it ran this many years...there would have been obvious running issues prior to this. Im just in denial...best of luck to you!
95 E34 530I V2.37
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Those who make peaceful revolution impossible will make violent revolution inevitable.
John F. Kennedy