38mpg??? that is hybrid-class consumption and i don't think Bimmer of your year and model is capable of that. Mid 20's would be a more likely figure depending on your driving style and usage(city drive vis-a-vis freeway).Haven't checked air filter - it's a large sponge version.
The idle is only slightly suspect. It starts fine - goes to 1100 drops to 900 goes to 1100, drops to 900.
Engine doesn't seem lumpy - but exhaust smells of petrol and white smoke for first few minutes. Looking on the web the coolant temperature sensor looks like the culprit - but my mate said that wouldn't make such a large drop in mpg (38 - 22)?
I reckon I'll change it and see.