Chris,
I sold my 540 a few months ago and went the Audi Turbo Diesel route. (No regrets)
Mainly due to escalating problems on the 540 - exhaust manifold, noisy gearbox, water leak (somewhere), viscous fan problems, etc, etc...
I haven't had any feedback from anybody on this forum - I guess as South Africans we are not worthy of a reply.
Only thing I can suggest is that you try Rob Green Racing in Randburg - they are very good with BMW's and they quoted me about R4K to remove the cats and install a new system - front to back. BMW quoted around R40K per cat to replace.
They will also be able to help out on the sensor issue, etc.
Their URL is:
http://www.rgmotorsport.co.za/NewIndex.asp
Hope this helps.