Daffy, I have to disagree with you with some of your points: Any diesel will/can have expensive issues. At any mileage. I will agree that a petrol will be more reliable than a diesel, but then whilst we've all done 37 to the gallon with the 3.0l engines, you sure as hell can't do that around town. You sure can, however, do 30mpg plus around town with the diesel. THAT's the big difference.
I recently picked up my 140k E39 530D SE Touring for £2300. It needs two new injectors.
These will be £100 each fitted by my local specialist Forza West. These guys recently did the Inspection 2 on my M5 for £330 INCLUDING parts, so it's more than easy to do it cheaply.
Buy wisely and you'll get a good one, for example - the manual versions of the E39 diesels do NOT have swirl flaps. Nor do they have gearboxes that sh1t themselves after 150k or if you wind more power through the engine. The auto gearbox in the E39 isn't the greatest, however so:
Try this on for size: If you start looking for a low miler, you're buying something that has big bills coming up. Take a look for a car that has HAD the big bills paid for - suspension, clutch etc; it's not rocket science.
I've a friend who insists on buying low mileage M5's saying that they're better, and won't think of considering my M5 which now has ticked over 100k. However mines had everything done to it (most previous to me owning it) and is a rock solid example.
He won't have it though, it's got to be a <100k miler.
Guess what.
He keeps having to fix things. Whilst I don't.
Anyway, you CAN find a E39 diesel for less that 3k easily. It WON'T be a Sport however. You'll also find that a manual is like rocking horse poo. But look and keep looking and they're out there.
Here's my two E39's (the touring was doing what it's great at: carrying stuff). http://farm4.static.flickr.com/3221/5867177771_9fc86ba1e6_b.jpg
M5 has a black/grey leather and aluminium interior and the 530D has a lovely cream and tree interior