[Aussie Mike]

Just looking at a few pics of E38 diffs and I reckon the 8.8 conversion wouldn't be too hard. Does your chassis use the BMW bolt in sub-frame or dedicated mounts on the chassis for the diff?

If you can drop the sub-frame out it would be pretty straightforward to fabricate mounts to take the 8.8 diff.

You would probably need to look at axles anyway because once you've replaced the diff then the next weakest link will fail. However depending on the diff dimensions you may get lucky and the stock axles bolt up especially if they use the 6 bolt CV's like the Porsche and Holden rear ends use (Standard bolt pattern)

The 8.8 diff is a good unit and well supported by the aftermarket. Lot's of choices for gears and LSD options. Its probably lighter than the BMW diff to with it's aluminum case.

If you lived closer I'd be happy to mod the cradle for you.

Cheers