no, the problem is the age of the material of that bakelite ring. Many E32 750 and E31 850 owners have the same problem. But no big problem, replacement is available even from aftermarket and remanufactured ones for less than $200.
ATE once sold the bakelite ring as well as the seals as single spare items, but no longer available, they now only sell cpl. reman ones.
Sorry @shogun; I was talking about the caliper pins- but replied to your post re the master cylinder. Interesting comment, any idea where to find the CPL ones? If they are not a good option, can a replacement in teflon or something be machined up and used? BUT: It may well be that the bakelite the best to prevent jams and leaks over time, heat and use.
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08/88 535i e34 M30+miller MAF, 'stiens, tints & teeth!