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Older thread on a similar topic
http://www.bimmerforums.com/forum/showthread.php?1814495-Won-t-go-in-gear-while-running-but-will-when-off
Are you using stock clutch? It's possible the extra power has caused things to wear out. (Like the pressure plate, as Paris indicated)
$750 to drop the gearbox is not completely out of line.
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