I think your first priority is to fix the dashboard electrical problem. Only then should you tackle to mi/km issue...because if it keeps shorting out, it will keep defaulting back to the mi. readout mode.
Sounds like there's a short somewhere in the wiring harness or connection to the instrument panel. Might want to check the connections at the fuse box first (easiest to find and fix).
<span style='color:green'>1994 325i </span>- - - 75,000 mi.
No mods - - - very happy as is!
<span style='color:green'>1995 525i </span>- - - 154,000 mi.
No squeaks or rattles... unreal!