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Sounds like a pre-cat back fire There are EGR breather tubes that run at the back of the engine above the gearbox if one is split or perished it could cause issues? Blocked CAT will cause to much back pressure never experienced it myself but I have read symptoms are poor performance hesitation etc. It may also cause misfire in the exhaust due to trapped un-burnt fuel? Oil leaks on the valve covers are almost mandatory on the BMW V8 !!! I don't know if you are aware of www.realoem.com enter the site put in the last 7 digits of your VIN and it will bring up your cars build spec, then search the EGR drawings it will give you an idea how they are routed. Same for all the systems on the car, as far as the CAT goes other than change I don't know what to suggest 2nd hand maybe?