Cause: Your car has "accumulated sufficient use" to set off the lights, which are designed to come on every 7,500 miles, alternating between "Oil Service" and "Inspection."
How to fix: Once you've carried out the procedures for either Oil Service or Inspection I or II as outlined in your Bentley manual in section 2, pages 6-10, you can reset the lights using the diagnostic connector in your motor compartment.
You can buy a tool that will do this for you. It costs about $50 and is a waste of money unless you aren't good with counting or watching your cluster. You could make a very similar tool using a 35mm film canister (who remembers those?) and a switch connected to two 6-foot wires inserted in the proper locations on the connector - it'll set you back about $3.00.
To do it the cheapo way, get a paper clip. Bend it so it's straight, then bend it in half, creating a narrow, "V" shape. Jump pins 1 and 7 in your diagnostic connector (the pin position is shown on the underside of the red cap - and it reflects the position of the pins when the cap is installed - if you're confused, see "Appendix 1."). The "V" shape helps maintain contact in in the connector. Get in your car. Turn the key to the second position (the one where all of the dash lights come on).
The "Oil Service" light should extinguish in 3-4 seconds.
The "Inspection" light should extinguish in 8-11 seconds.
After your desired light has been extinguished, immediately turn the key to off. Failure to do so will result in an incorrect interval for the other light. Remove the wire, replace the cap, close the hood and have a Dr. Pepper or a beer (if you're into that sort of thing).
Appendix 1
Here's a picture of the connector in most E28s with Motronic 1.0:
Motronic 1.3 used a 20-pin data connector. Ground pins 7 and 19.
What happens if my lights don't shut off?
If your lights don't shut off or both are on, you have a problem Service Indicator (SI) board. The memory on the original board is stored using Ni-Cad batteries which have limited life and then start to corrode, leak and just create a mess. If this is the case, you can replace the board or bypass the on-board batteries and create a remote battery box of your own design. There are also battery-less boards that use flash memory which can be had through Mr. Haygood. His prices are much lower than list. You can also be lucky, as I was and occasionally find them on eBay. List on these is somewhere in the $300 range, and I picked mine up for about $75 including shipping. Results not typical.
Removing and Installing the board:
Removing the SI board might seem like a daunting task, but it's actually quite easy. I R&Red mine in less than 20 minutes and had never pulled a cluster before.
Cluster removal:
1.) Pull the steering wheel to the fully-telescoped position.
2.) Using a Philips screwdriver, remove the two screws that hold the top of the cluster into the dash. If you look below the top ridge of the dashboard, you should see them. If your cluster has been out before, chances are they're missing. Be sure to celebrate that with a beer or a Dr. Pepper if that's the case.
3.) Using a thin, rigid object (a putty knife is ideal), carefully pry between the plastic lip on the cluster and the dashboard. The cluster will pivot towards you.
4.) Gently pull the cluster out of it's home.
5.) Luckily, not every wire has a separate connector and everything is color coded. Carefully remove the connectors. The large, rectangular connectors (Blue, Yellow and White) each have a locking black component. Use a long, thin, flat blade screwdriver to carefully release this locking component by working it straight out (It should only move 1/2" at the most and stays connected to the connector).
6.) The blue L-shaped connector pulls straight down (note it's orientation before reassembly). This is what sends the indicated speed from your speedometer to the cruise control brain. Failure to reattach this correctly will render your cruise control inoperable.
7.) If your car is equipped with ABS, the entire bulb and socket are removed from the cluster. Pull straight out.
8.) If your car is an automatic, there is a connector that pulls straight back off the very bottom of the cluster (this is the PRND321 indicator). Carefully remove it.
9.) All wires should be free, so now it's time to remove the cluster from the car. If you're fortunate, you won't end up having to remove the wheel. Some owners might have to due to clearance issues. The key here is not to force anything. Perhaps the most fragile part to worry about here is the auto selector indicator board. It can get damaged on the top of the column if you're not careful.
10.) If you find yourself having to remove the steering wheel, it's pretty simple. Early car owners (coarse-splined columns before 7/85) simply remove the horn button or center Roundel and use a 22mm socket, extension, etc and remove the nut. Before removing the wheel, be sure to mark the location of the wheel relative to the column. Later car owners (after 7/85 with the fine-splined column), you'll need your key. Insert it and turn to the 1 position. This deactivates the steering wheel lock. The rest of the process is the same as above.
NOTE: NEVER TRY TO REMOVE THE WHEEL WITH THE STEERING WHEEL LOCK AS A MEANS OF LEVERAGE! You can permanently damage this mechanism and it'll ruin your day if it happens.
11.) Remove the cluster and have a beer (or a Dr. Pepper).
"Installation is the reverse of removal." Mr. Haynes
Once you have the cluster out, go to a safe working environment with a clean, flat surface. Place the cluster face down on a towel and be sure to have a container to place screws in. This would be a good time to inspect your odometer gears as well. In fact, it never hurts to have a spare set on hand from Jeff Caplan at http://www.odometergears.com. Check out Azure's FAQ in the Tech FAQ section.
1.) Remove the 8 screws that hold the cluster together using either a Philips head screwdriver or an 8mm nut driver (the former is better if you want to minimize the number of tools on the job).
2.) Separate the two halves (white and black). Then ground yourself to something since you're going to deal with circuit boards.
3.) Remove the spedometer. Pull straight out, do not wiggle it.
***Early clusters (I don't know the cutoff, but it will be obvious) have a separate board for the service indicator. Late clusters included it as part of the main board. The easiest way to spot them is to look at how many red LEDs are in the SI display. Early clusters have 3. Late clusters have 1. If you have an early cluster, follow procedure 4a. If you have a late one, follow 4b.
4a.) Disconnect the green ribbon cable from the main board. Some clusters have a grounding wire that runs from the SI board to the main board. Some don't. It is a black wire with a sleeve connector that fits over a pin on the main board. If it's not connected, have a beer or a Dr. Pepper. If it is, disconnect it - carefully. There are 3 small, slotted screws that hold the SI board to the rear of the cluster. Remove them. If they have buildup of battery acid, place them in a solution of baking soda and water to neutralize them and set them out to dry. The board just lifts out. If any acid has leaked into the area surrounding the board, neutralize that as well and allow to dry. Place your new board in where the old one was. The circuit board is most likely green compared to the yellow one that was removed. Don't be alarmed. I think Programa ran out of cores and had to make new ones. Place it in and reattach the 3 screws. Before attaching the ribbon cable and ground wire (if necessary), ensure the two nuts holding the temp/fuel gauges to the main board are tight. If you were having issues with these gauges, they might not have been grounded properly. Reattach the ribbon cable and ground wire. Place everything back together carefully. If something doesn't fit right, don't force it. Step back and re-evaluate the situation before soldiering on.
You should have no leftover parts - except the old board.
4b.) You are going to remove the main board of the instrument cluster and replace it. Remove all bulbs and the speedometer. Using a nut driver (10mm), remove the two nuts that secure the temperature/fuel gauges to the board. Affix these to the new board, replace all the bulbs and reassemble.
Again, no leftover parts other than the old board.
Reinstall the cluster in the car. Double-check all connections. I would wait to put the cluster in all the way (as in locked in position with the screws affixed) until you test-drive the car to ensure everything works as it should. There is a chance that you will have to follow the procedure for resetting one or both of the lights, but most likely, no.
To make your own remote battery box:
Purchase a battery box for whichever type you'd like to use. AA batteries are cheap, so that's what the PO of my car went with.
1.) remove the solder from the solder joints for the battery holder on the board (follow the (+) and (-) tab through the board).
2.) Solder a lead to each solder joint - be carefull as there are other joints in the vicinity of these. Do not solder to the tabs - that is what my car's PO did and it failed pretty much by design.
3.) Solder the leads to either of the terminals below where the battery is marked - and +. Remember, Ni-Cad batteries should be wired in series, but Li-Ion in Parallel, since you don't want more than 3v and Li-Ion do not come in lower voltage.
4.) find a place for your box that is easily accessible when the batteries need replacement - generally after 3-4 years depending on the harshness of the environment.