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I had an '86 528e, and had a little trouble with the instrument panel. With the lights on, the light over the tachometer would not come on unless you banged your fist sharply on the top of the instrument panel. Later, the fuel consumption gauge stopped working intermittently. And at one point, the speedometer went completely dead (that turned out to be merely a blown fuse). I also recall that my water temp gauge jumped around or didn't work at all.
First check and make sure all your fuses are OK--also it might be good to clean their contacts of corrosion, just in case that's the issue. Your under-hood fuse box should have a nifty clear plastic cover that indicates what fuses are for what.
If that doesn't solve anything, you may need a new circuit board.
I actually replaced the entire instrument cluster in my car because the odometer stopped working. I got a new (used) one for about $75. I now have a '90 535i, but the old 528e cluster is sitting in my room. If I recall correctly, the speedometer, tachometer and fuel gauge work fine, as do all the indicators (except the oil service indicators, which went on and off at will). Like I said, I think the water temp gauge worked intermittently, as did the fuel consumption indicator. No erroneous warning lights ever came on. And of course the odometer does not work (reads 157485).
The instrument cluster comes in and out of the dash very easily--it's just held in by two screws that go into the underside of the lip above the cluster. You also have the remove the steering wheel (VERY easy unless your car has an air bag--remove the enamel emblem and use a socket wrench to unscrew the big bolt that holds the wheel onto the column). You can surely get a new (used) cluster from e-bay or a junkyard for less than $100. Also, I can ship my old one to you if you just reimburse the shipping cost.
Hope this helps.
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