Why is oil mixing with water in reservoir only and not in engine
Could still be a head gasket, they can leak oil into water passage without coolant going into oil. Time for a compression test, may want to run Block Tester as well.
Oil floats on water so it may be making its way to the reservoir which is at a high point.
If this is an automatic, it is possible the trany oil cooler inside the radiator has a leak.
Not familiar with the 320i but the 328 and stuff have a problem where the oil filter housing gasket leaks and mixes the oil into the cooling system.
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