540i/6 comes stock with a 2.93 open diff, this ratio was used to get the mileage rating up for CAFE purposes. 3.23 is really the perfect ratio-it was used only on the late euro E34 M5 6 speed. As they are are almost none of these available stateside, the best bet is to find a 3.15 lsd (big dif) from an E32 740/750il as they can be had for under $400 and the install is fairly straightforeward. Input flanges must be swapped. AFAIK this is the only diff that fits in a M60 equipped E34.

Ben