3500rpm+ trouble on my 318i

[otterstricks]

Hi,

I have a '91 318i touring which has a noisy tappet that i can just about live with, however on accelerating the engine will only go to about 3800rpm before becoming unpredictable i.e revs increase but with reduced power and acceleration drops, then I'll get a surge of acceleration for about 2-4seconds before the engine seems to revert back to the power levels before the surge. This limits my top speed to around 80mph in fifth gear, which is fine but I'm not too keen on approaching the nasty rev zone when doing normal 70+ on the road for fear of any internal damage I may be doing.

My first thought are that it could be the dissy cap and rotor arm, but I'l throw it out to you guys before I go spending the money.

Thanks for any help

Murdo