OP, the problem lies in the block.
The BMW M54B30 is an Aluminum Alloy block, it simply gets a harmonic resonance in it at higher RPM. Kinda like a tuning fork. Apparently the oil pump is the weakest link in the chain. The three things that can be done to alleviate this problem are 1) ATI Super Damper $800 2) TC Kline / vaio76109 Super Oil Pump $750 3) S54 Timing Chain Tensioner $160.
I've personally had a high RPM motor failure because of this, I believe the three items listed above are necessary for sustained high RPM usage.
Rob #43 ITS/ITR/STU, BMW 325I, STU LAP RECORD
SUMMIT POINT WV 1:24:229 S.C.C.A.
(DynoDynamics http://www.vimeo.com/8486878 Dyno Video)
"Chance Favors The Prepared Mind" M54 CAMS 264/252 $849
Originally Posted by RacerX
Nitrous is a little trickier than boost, but it's not the spray that kills motors, it's STUPIDITY!!