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It has been known that IF your oil is old and contains lots of water (ie lots of short trips) this can cause the oil level sensor not to read correctly. Your best bet is to change your oil and then recheck the sensor. These sensors can and do go bad. Btw... it is not only an oil level sensor but a oil quality sensor as well.
Someone did post a BMW pdf on the oil level sensor and how it works and how it can show a false reading. Perhaps try running a search here on 1addicts.
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