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Originally Posted by milamookie
Great feedback guys. Love this forum. I'll have the dealer take a look before i commit to anything. I'm still open to more comments
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Likely, as Hack said, diff leak or axle leak. Both really common on E46 M3 and Z4M. If a prepurchase inspection shows this, I wouldn't let it totally put me off the car unless other issues crop up as well. Several of those other potential issues are noted above.
You could deduct the cost of the repairs, along with some extra, to lower the price.
http://www.zpost.com/forums/showthread.php?t=524602