If you like, you can skip directly to where you can buy this part.
We sell good, original BMW, used E34 5-Series 525i 1989-1990 325i cylinder head units. The price is $300 plus shipping.
At the time of this writing (spring 2013) a large California BMW used parts business offers a used, cleaned, inspected and vacuum-tested unit, on eBay, for just under $800. Their part also contains the cam, springs and valves.
Another option is to go remove the part from a help-yourself junkyard, but the amount of work involved and the skill level required, are not trivial. There is also a fairly sizable risk involved, because a damaged cylinder head might just be the reason why that particular car ended up at the junkyard in the first place.
Allegedly the BMW dealer charges close to $1,200.00 for a new, original BMW cylinder head, and then you still have to transfer your cam, rocker arms, valves, springs, etc. … and some of those might well be damaged too, and need replacement, if the reason you need to replace the cylinder head is that the timing belt snapped, and the valves and pistons collided.
We don’t charge a core charge. Some of the other vendors I’ve researched do add on a core charge. To redeem that, you have to take or send your old part back to where you did the transaction, within a particular span of dates. This seems reasonable — yet often, this ends up being non-viable in practical reality. In such cases, the core charge ends up as simply one more cost.
It’s probably safe to say that our used units are price-competitive.