Yup, my e46 M3 diff actually fell while driving. Thankfully no mayor damage, $150 got it solved in a single day.

Apparently the M3 has a common failure at the diff cover bushings, which no body (not blaming you guys) told me I should have changed them before the whole process of installation. In the e36 the bushings can be replaced for $11 each, while in the e46 the entire cover has to be replaced because BMW wont sell the bushings separately.

The scary part was when it actually fell because I was on the highway and the car started shaking very hard whenever I would touch the gas. Since I could not stop to check, and I was near my mechanic, I got to his house thinking the worst; new diff, new carrier, new axles, cracked panels, sell the car. He told me that he could get the part from the dealership at $150 (instead of the $365 that would have cost me if I went by myself), and he would not charge me because he had forgotten to suggest me changing it the first time. Fortunately the part was available and later that day I was on my way again.

Now the car feels even better than before, and I am happy no other damage was done, and I can keep the car.

Pic of the "carnage"



So, if you are planning on doing the M3 diff swap, take this into consideration. You can also buy solid bushings, or polyurethane bushings, and reuse the diff cover; but that is more race oriented.