I'm looking for one now. I put it under water under pressure and didn't see a leak, but this is the most likely issue.

 

If you've never been to a junkyard, places like LKQ PickYourPart are great for stuff like this. You pay like a $2 entry fee, go in with your tools, find what you want and get out of the donor car. Typically, there is a short DOA warranty, so if it just leaks right off, you can go back and get another one.

 

I'm back. My poor son has been replacing oil on the regular since I haven't had time to mess with it.
Today I connected my lines out of the filter housing together, removed the oil cooled totally, and took a drive.
No leak. Seems there is a cooler leak only when hot.
I was reading on one of these forums that not all 535's with the N54 had an oil cooler. Is that true?
Mine is a 535i....
If it was an option, after pricing them, I perfectly happy to leave it off.
Thanks.
ETA: Removed the cooler and all is well. Engine does not overheat nor leak oil. I will cut and crimp the suspect section of the cooler and reinstall in the future.