There should be a letter "S" on the diff casting, as well as on the missing tag beginning with "S". Most 1998 Z3's came with a Torsen visco differential and not an LSD. Hope this helps. There is a ton of miss-information about this. I too, have a manual 1998 2.8 as the base for my 250 SWB Coupe still in process. If you have the Z-3 handbook for that car, it may help. If not, let me know and I'll peek at mine.
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