$600 is about normal with labour for a cooling system overhaul. If it had never been done before, then it needed it. The coolant system was made of mostly plastic which over time becomes brittle from the heat and cracks resulting in overheating.
The oil filter housing leaks because of the small gasket between the housing and the block. Replacing that usually fixes it. The gasket is less then $10 last time i looked. If you google "e36 oil filter housing" you will see the pictures of it, and the black gasket im refering too. However, if the housing itself is cracked, then yes you would have to replace it. Their is no real way to tell for sure until its removed and inspected.
Check the belt for odd wear. Look at it with the engine running. You want to make sure their is no wierd movement or vibrations in the pulley. You can remove the alternator and have it tested at most auto parts stores for free. What type of noise is it makeing? An alternator can be rebuilt. They sell rebuilt ones all the time as it is cheaper. The alernator in my truck is "rebuilt" and came with a one year warranty.
The original supplier of OEM struts was Sachs. If you want to stick with an OEM ride and quality then look for Sachs struts. They can be had for fairly cheap if you shop around. I normally see em for about $125 each.
Check out Bimmerspecialist.com for pricing on OEM parts.
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