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Hi all.
Recently Brought a E39 520SE auto. Although being a heavy car for the 2 litre lump to pull around it does feel down on power until it gets to around 3000 RPM. The previous owner has replaced the rear Exhaust box with a straight through pipe could the lack of back pressure cause a lack of power ?
 

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It could be the vanos jamming, I had this problem a 1996 523i single vanos m52 engine.

Also have you checked the rubber pipe going to the throttle body for splits?

You may find getting the codes read and cleared helps as well.
 
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