I've experienced this issue many times, as well as in my bro's car. I had my transmission replaced at 22,000 miles. However this did not correct the problem completely. From trial and error I found the best way to avoid the grind is not by babying you 1-2 shift but rather jamming it with as much speed and power as i can muster.
This has eliminated the problem for my bro (F360C) and I. New trans or not.
That being said i still agree that this tranny was meant for our engine. We should have gotten the 6speed outta the E60 M5 which i think is a beefed up trans from the E39 M5?
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