Update: Had a friend help me out. Turned engine manually and its all free and such. No missing gear teeth on the flywheel.

The bendix gear is popping out just fine from what I can tell. But the starter motor is not spinning as I thought, just the loud fuel pumps.

So it would appear that the starter motor is not energizing right. If the bendix engages out, would the starter itself fire up or is that another circuit?

When I was doing the shifter wiggle test, it would engage in neutral. It no longer does, only in Park now. Does the switch provide separate power to separate circuits to start? My next thought it to replace it, only because it will not engage the bendix gear in any position other than park now. And maybe that is causing the issue?

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1991 560 SEL / 185k miles
1992 750il / 17k miles - project car