Mahalo! Great write up! I'm monitoring the car now to check results of my work.
Was lucky that a former BMW of Honolulu mechanic and now independant shop co-owner helped out tremendously with diagnosing the problem area, and giving me the gasket and o rings for free!
Took me 3 hours to complete, the hardest part was putting the alternator back on because of the precise clearance for the bolt.