My 1999 model year E46 has had all of the usual oil leaks - valve cover, oil filter housing, oil pan gasket and the manual shift shaft in the transmission drips a bit too.
The engine oil leaks, while time consuming, were not difficult to repair and certainly the oil pan gasket repair was not worth $1000. It is the perfect time to do the oil filter housing gasket when you are doing the oil pan gasket because you have to clear the area completely and it becomes a "two birds with one stone" proposition. I always thought that I had a power steering hose leak because everything remained covered in oil. Once I did the oil pan gasket it is now dry as a powder keg underneath my
Fixing the leaks would help, even if it lowered your oil loss to 1,000 miles per quart. That would be good enough for me given the time on the engine, It wouldn't hurt to try some kind of cleaner, but I don't have high hopes. And who knows, it might kill the main seals or something.
The thing with piston ring deposits, they are very, very tenacious. I've torn apart engines, barely able to remove stuck piston rings. The lands would be coked with deposits. I've soaked pistons overnight in 100% Berryman's B12 Chemtool carb cleaner (nasty stuff) and even then most deposits remained rock solid.
I'n not sure what your budget is and how much you like the car, its overall condition, etc. - but maybe start snooping around for a better engine from a dismantler?
Scott
side suffers the same plight.