Here's the dash test for the E36:

Insert your key into the ignition, tap the odometer reset button to turn it on. Press and hold the odo reset button, then, while holding, turn your key to the accessory position.

Your instrument cluster should flash for a second, run a couple numbers on the lcd, then all the needles should do a full motion test.

See if your mpg needle freezes or has difficulties. This will tell you if the needle is screwed (need new instrument cluster / repair instrument cluster), or if it's related to something else.

And the OBC link: http://www.bmwe36blog.com/bmw-on-board-computer-obd-secrets.html