squeaking differential after head gasket rescue

[yxd0018]

My 1998 328i comes back from head gasket ICU and seems not leaking after 1k miles VT ski trip. However it developed high-pitch squeaking noise all the time (acceleration, deceleration, cruise) right after coming back. The mechanic checked out and said it's the differential. He is right about no effect on the squeaking from differential fluid replacement.
My questions are:
1. is it dangerous to driving car with squeaking differential (assuming it's pinion and bearing? How long will it become unsafe? How do I know it's not safe to drive?
2. mechanic quotes $500 to install a differential and I think that might be expensive. I probably can get a used differential from a nearby junk yard. Is it DIY friendly to replace differential by myself?
3. since the car gave a lot of issue lately and doesn't worth that much, I'm waiting for a new car in Jan as the 2nd car. 2 cars gives a lot of choices, and we don't drive that much. Still debating between keeping this car or trading in given the crazy 2nd market.

Thanks.

[importbanana]

1. is it dangerous to driving car with squeaking differential (assuming it's pinion and bearing? How long will it become unsafe? How do I know it's not safe to drive?

No definiteve answer possible. Not directly dangerous, impossible to say how long until unsafe. Not safe to drive when something locks up or noises increase to a concerning level indicating something could lock or get seriously damaged.

2. mechanic quotes $500 to install a differential and I think that might be expensive. I probably can get a used differential from a nearby junk yard. Is it DIY friendly to replace differential by myself?

I assume 500 is ok if including differential. If not, then too much. Can't tell you if DIY friendly. To me it is. Might not be to you. There's tons of information about it. Research and decide yourself.

3. since the car gave a lot of issue lately and doesn't worth that much, I'm waiting for a new car in Jan as the 2nd car. 2 cars gives a lot of choices, and we don't drive that much. Still debating between keeping this car or trading in given the crazy 2nd market.

If only one car required and another one is coming and you're not really in love with your e36 then I'd sell.

Noise is only present when car is rolling? Not when standing still with engine idling?

[pbonsalb]

Does not seem like you really love the car. Sell it. 20-25 year old cars are best for DIYers or those who really love them and have the money to fix them. There will be more and more things to fix due to the age of the car.

Any chance the squeak is the driveshaft and not the diff? 328 diffs don’t cost much used but it will also be old. They tend to last and rebuilding is expensive so swapping in a used one would be the cheapest to get the car back on the road and hopefully — but not guaranteed — the diff would last a few more years. Some junkyards offer a warranty on the part, but you will still have to pay the labor again if there is a problem.

[yxd0018]

Does not seem like you really love the car. Sell it. 20-25 year old cars are best for DIYers or those who really love them and have the money to fix them. There will be more and more things to fix due to the age of the car.

Any chance the squeak is the driveshaft and not the diff? 328 diffs don’t cost much used but it will also be old. They tend to last and rebuilding is expensive so swapping in a used one would be the cheapest to get the car back on the road and hopefully — but not guaranteed — the diff would last a few more years. Some junkyards offer a warranty on the part, but you will still have to pay the labor again if there is a problem.

I looked at the youtube clips of replacing diff and it seems you need a lift and transmission jack to move heavy diff. The mechanic quoted me $500 has good review in the neighborhood. Also he mentioned fixing the pinion or bearing inside doesn't make sense as it has more risk to break the diff.
I doubt it makes sense to spend to spend more money than the car worth. Just feel pity that I just patched head gasket.

[tjm3]

This squeaking issue is pretty vague. More than likely it's probably a combination of cold weather and old seals, pinion and/or axle stubs. Even so, I might try this: get some limited slip friction modifier and shoot 10cc into the diff, drive and observe. If there's no change then just leave it alone. In reality, the friction modifier thing is more evident when making tight turns and there's no mention of that issue.

[yxd0018]

This squeaking issue is pretty vague. More than likely it's probably a combination of cold weather and old seals, pinion and/or axle stubs. Even so, I might try this: get some limited slip friction modifier and shoot 10cc into the diff, drive and observe. If there's no change then just leave it alone. In reality, the friction modifier thing is more evident when making tight turns and there's no mention of that issue.

I never changed the differential fluid for the car and the fluid is very low when mechanic checked. I just replaced it with 75w140 even the mechanic says it's too late and the squeaking sound is sure still there. Maybe the diff has already been damaged.

The used diff costs $150 and not sure if it's do-able when the car on 4 jack stands and floor jack as transmission stand. Pelican assigns the diff swap at difficulty level 4 out of 10 and I'm not sure if it's accurate. https://www.pelicanparts.com/bmw/tec...ntial_swap.htm

[tjm3]

I never changed the differential fluid for the car and the fluid is very low when mechanic checked. I just replaced it with 75w140 even the mechanic says it's too late and the squeaking sound is sure still there. Maybe the diff has already been damaged.

The used diff costs $150 and not sure if it's do-able when the car on 4 jack stands and floor jack as transmission stand. Pelican assigns the diff swap at difficulty level 4 out of 10 and I'm not sure if it's accurate. https://www.pelicanparts.com/bmw/tec...ntial_swap.htm

If it turns out to be relevant, I've found that the type of limited slip gear oil and how much friction modifier makes a difference in noise, but we're not really sure that's the real reason for the noise. Just a thought.
I've always tried to use BMW SAF-XJ and never had any noise issues with that stuff. A '4' is probably accurate if there's no problems unbolting the thing. It can be done on stands using a floor jack to raise the diff and it would help to have a second person to help maneuver it into place.