I appreciate you guys. Thanks for responding to my non-Z question. I did walk away from this car. The owner of the car is a really honest seller, and he didn't know anything about this. He's just not a BMW guy, and while I think he did oil changes regularly (probably at a local place and not BMW shop), none of the other maintenance was done such as the inspections, fluid swaps, etc. The engine may still be fine, but it was just too risky for me, especially the car being hundreds of miles away and needing to get it back. I found a BMW enthusiast selling a 330Ci ZHP in black on black, and I love it. Looks great, has the 18" e46 M3 style wheels, the M Tech II bumper, trunk spoiler, M3 suspension, good sounding ZHP muffler, etc. And most importantly, all maintenance and common failure points have already been addressed, and it has new PSS tires. Woot! Score!
Those deposits were said to be hard. I think they probably would have sunk, but I think they must have attached themselves to the float. Just like on our cars, there should be a red float sticking up, but I think it is weighed down with these deposits.
The e46 M54 engine has a near 100% expansion tank failure rate, and other cooling system components break down and leak. I think the idea that some non-BMW used car dealer used stop leak when they found a leak in the system is highly probable. Also highly probable is that they used Prestone antifreeze from Pep Boys in the coolant. Maybe both.
Thanks again!
Salty