I had a somewhat similar problem with my 95 318i's OEM LSD.
Mine would "click" when coasting, and was speed related. Drained the oil, and found a bunch of allen head bolts in pieces. I know this is common on E36's but I am not sure about E30 small case diff's. Basically the tiny allen bolts holding the LSD unit in where falling out.
Drain the fluid, and open the diff and have a look.