I've dropped the entire subframe. I did it by myself with just a floor jack and I did not remove the differential of half-shafts. The whole rear came down as one unit. No air tools either. I think having a nice big 1/2" drive ratchet and some 1/2" drive metric sockets covers almost the whole car.
By memory....
• Break loose the big main subframe nuts. There's one on each side and they sit vertically.
• Break loose the rear wheel lug bolts.
• SAFELY and securely raise the rear half of the car. I used two heavy duty jack stands, plus two more lighter duty ones to back them up. I also put the rear wheels under the rear half of the body for another backup.
• Remove the rear wheels.
• Remove the spare tire.
• Remove the exhaust. Unbolt it at the spring connection, not at the manifold. Mine were in bad shape and they snapped. Buy new ones to have on hand. It's kind of awkward to lower. A helper would be nice, but I used a jack stand to help a bit.
• Remove the parking brake cable lock nuts, up at the lever. (4 total)
• Unplug electrical connections (brake pad, wheel speed sensor)
• Disconnect brake lines at the forward most flexible flexible hoses. It'll drip like crazy, so be ready to catch a lot of fluid. It seems to drip forever too. (You might actually want to do this step as late as you can, then you won't have dripping fluid getting in your way)
• Unbolt the sway bar links. Or, I might have unbolted the sway bushing brackets at the body and let the bar stay attached to the suspension.
• Remove all the heat shielding below the driveshaft. There's a small tunnel crossmember in there also. Make sure you get rid of that because it'll help you lower and flex the rear half of the driveshaft.
• Unbolt the four nuts/bolt at the differential to driveshaft connection.
• Loosen, but don't remove, the differential "ear" bolt/nut.
• Place the floor jack under the center of the differential. This will be close to the balance point of the entire subframe. Jack it up so it takes some weight.
• Remove the lower rear shock bolts.
• Remove the differential "ear" bolt.
• Remove the two main subframe nuts.
• Remove the subframe reinforcement plates. These are sandwiched between the subframe bushing and the main subframe nut. There are two bolts on each side that bolt the plate to the body.
From what I can remember, that's all that's connected.
• SLOWLY start to lower the subframe. Make sure it's feeling balanced! The whole unit is heavy, so be careful with it.
• The driveshaft will need to flex downward (at it's u-joint) and you drop the subframe, so make sure it's free to flex down.
• Once the subframe bushings have cleared the big main studs, you can start rolling the subframe backwards. That will allow the driveshaft to come out of the subframe "hole" that it's in.
It should be clear of the car now. It seems like huge job, but it's quite straight-forward.
As for the bushings, you can then unbolt the rear semi-trailing arms from the subframe, and work on those bushings. Check out my little write-up on that. It shows how I pulled and pressed my semi-trailing arm bushings.
http://www.318ti.org/forum/showthread.php?t=9861 You'll be able to press in/out the semi-trailing with the half-shafts still bolted to the differential. If you want more working room, you could unbolt the six (?) half-shaft torx bolts and pull the trailing arms from the subframe.
My number one suggestion for pulling the trailing arm bushings is USE HEAT!!!! Heat soak the bushing with a propane torch before you start pressing them out. I tried this earlier without a good pressing tool OR heat and it was horrible. They are small bushings, they are very tough! The method I used in my link worked wonderfully
As for the subframe bushings, that was a different story. I welded up a pretty good pulling tool, but I never used heat. The bushings were in there so strongly that it broke my steel tool
I'm quite certain if I used a propane torch they would have come out without an issue. I ended up drilling them out, and hacking up my subframe. I replaced them with urethane bushings, so installation was simple. Reinstallation of stock bushings would have required a good press and some bushing lube. Please don't underestimate how tough these suckers are. They are amazingly stout.
If you look in my link, you'll see I used a plain synthetic grease to reinstall the trailing arm bushings. BMW has something called "Circolight mounting agent", but I've never been able to find it. One thing I used lately on bushings was "Goo-Gone" sticker/gum/wax remover. It make the rubber bushing really slippery, but if you let it sit out, it'll evaporate, just like the Circolight. I wouldn't attempt to install these bushings dry.
My suggestions for stuff to replace....
• Trailing arm bolts and nuts (Four bolts, Four self locking nuts) If you think about it, these bolts are rather important, so I wanted new ones.
• Differential "ear" nut. It's self-locking.
• Rear driveshaft self-locking nuts. Four total.
• Main subframe nuts. Two total.
• Exhaust bolts & nuts. Two bolts and two nuts (?) They are the long skinny bolts that go inside of the springs.
• I replaced my rear brake hoses while I was at it. Four total.