I had a 1984 e30 318i for a few years. Are you sure it has the correct dipstick? Different models have different lengths and maybe someone replaced the original. Did you push the dipstick in all the way when you checked the level? Has the oil pan been replaced with an aftermarket high capacity unit? Actually, I've never seen a high capacity for the 1800cc engine but I'm trying to think of anything. It's really strange that you saw oil on the dipstick with 3 quarts but way lower with 4 quarts. If there are no leaks and the engine isn't showing any signs of stress then the oil must be doing it's job.
Good luck.
Chris
A2 Motorsport
www.a2motorsport.com