Here is the culprit:
As it can quite clearly be seen the insides are pushed out. I did this easily with my finger, which is wrong! No wonder the back end of the car was all over the place with this bush able to let the subframe slide up and down, until it bumped against chassis.
I also have my suspicions that this bush has been incorrectly replaced before, leading perhaps to premature failure. More details in the guide "E34 Rear Subframe Bush Replacment".
I replaced the O/S bush first as this was the one making the most obvious noise. The tool I made performed well and I was very glad I had that. It would have been impossible without it and also the bit of thought I put into paid off too.
Took the car for a test run after changing just the O/S bush and WOW! what a difference! It feels so solid now, less noisy (as in droning of the drivetrain being more isolated from the cabin) and handles much, much better. Well worth doing that.
Seeing as there is now no more clunking when driving, I believe the N/S bush is still in good condition, so even though ideally, I would like to change both, time and the need for a working car prevail, so I will leave that for another day (or when it wears out). If it ain't broke, don't fix it.
Today I also changed the oil and filter with Magnetec. A bit overdue. But the amount of oil that comes out of the car...:
...always amazes me and just goes to show how it doesn't use hardly any oil.
Also I finally got round to changing the pollen filter. It had got to the stage where the flow out the vents was very low and on max power, was sometimes not able to cope with keeping the car demisted.
Taking it out wasn't as complicated as most people made out. I read a lot of accounts of it being a 'nightmare' job and oh so fiddley but it really wasn't that bad.
If you search for some guides (E32, very similar, example) a lot tell you to remove all sorts of bits including the 'sword' and covers over the heat exchanger on some, but I didn't need to remove any of that.
I just removed the panel under the steering wheel, the duct, the trim which conceals the area where the filter is, then the clip which holds that on, then I could remove the cover to gain access to the filter. The filter then came out as described, splitting in the middle to help manoeuvre it out.
Once out, there was a fair amount of crap in there, mostly leaves. Looking to the aperture, I was a bit concerned about some sort of stain or damage to the heat exchanger face. Its hard to see in there (head upside down, against clutch pedal) but there really wasn't much I could or would do about it now. So I wiggled the new filter in place, and re-assembled everything in the reverse.
Someone has obviously been doing something in this area before though as the panel under the steering wheel was very damaged, lots of mounting points and areas broke and missing. So it doesn't hold the duct in position very well (daft design anyway). But it will do for now. Might try and find a better one one day.
Inside the filter housing:
No wonder it wasn't allowing much air flow through:
One other, minor job I did was to just flip an electric window switch in the back around, as one of them was upside down.