The other day I went to start my 1997 328i Auto E36 BMW and I got nothing. No crank, no start. After reading the codes, I realized the EWS2 and the DME were not communicating properly. They send rolling codes to make sure the key transponder correlates to the DME. The key, DME, and EWS2, are all linked.
After some quick research I realized that there were 4 ways to fix this issue:
1. Get a new key from BMW
2. Re-align DME and EWS2
3. EWS2 immo emulator
4. Send DME in for EWS2 bypass service
My ultimate decision was to send in the DME and have the EWS2 bypassed (www.precisionecu.com). With option 1, there was always a potential for there to be another issue in the future. With option 2, there is also still a potential for them the come "out of alignment". With number 3, you need special software to preform this and I didn't want to spend time trying to find someone local or spend hours trying to get the software to work myself.
If you do send the DME in for the EWS2 bypass you NEED to do the following:
1. Bridge/jumper pins 1&3 on the EWS2 module (located behind the glovebox)
This makes takes the ignition signal (key in starting position) jump straight to the starter motor. NOTE: by doing this you are bypassing the parking switch. You'll be able to start the car in gear which can be dangerous. Achtung!
2. Cut pin 4 on the EWS2 module (This is a disable signal that gets sent to the DME)
After this everything should work like normal. The EWS2 module will still show a code for a key mismatch but that doesn't matter and it won't cause a check engine light. The only downside of eliminating the EWS2 system is that now any E36 key will be able to start your car. For me, this wasn't a huge issue. My car has 212k miles, is an auto, and isn't in the best shape. If someone steals it they might be doing me a favor.