With the airbag light on the suspicion from the previous owner was that the seat occupancy sensor was the culprit, but the codes were indicating something different... 3 codes were up - the right side impact sensor which is under the carpet under the drivers seat (this was suspect in my mind due to the above water pool being constructed when it rained...), a module general internal error, and a module power supply.
The internet led me to all places on this subject... as it does... and it seems the modules of this era e39 (and others) were susceptible to "failing" If this happens, you either trundle off to the dealer, bend over, and well... you move the car on with airbag light on... or you try and deal with it yourself.
So I went about looking for another module in the first instance. I trawled the VIN's of the pick a part e39's and as it so happened, for $34 I found a near identical module, same part number, same airbag configuration, and the next software version on. The modules are located under the back of the centre console so trying to remove one with no power to move front seats to gain enough access is problematic... if you need a centre console - don't go to that particular car...
Yesterday I fitted the module, applied power, coded it to the car with NCSexpert, and tried to clear the modules historic codes which were both front head airbags... the sinking feeling of defeat was lurking as the red dash light persisted... but after about 5 minutes or so, the codes cleared and stayed clear and my dash is now dark... A major hurdle (for me) overcome as we head down the path towards a WOF...
It also appears that these modules don't necessarily fail, but rather "lockup" with bad data from a rouge sensor, or after a number of crash incidents... They can be "cleaned" and I intend to send the module extracted off to a bloke I met on the internet (?) and let him wave his magic wand at it...
A good day and also thanks to @BreakMyWindow for his expert guidance as always.
In other news I replaced the power steer reservoir with a new one in the hope of stopping the seepage down the hoses, and also the AUC sensor (the air cons "sniffer" for hydrocarbons which shuts off outside air if detected). I had grabbed one at pick a part. The drivers door seal and sill trim were also replaced with good spares I had "in stock"...
Transmission is still behaving, no codes present, but haven't really driven it too much with no WOF and slicks on the back... I have another transmission lined up, still researching details on that subject...