i have a boost gauge on my r53 and when im at 8-9psi boost the needle bounces rapidly between 7 and 9 psi. also when around 4500-5000 rpm the boost bounces from 0 to 5 psi. what can this be? maybe the bypass valve? when i reach 6000 rpm i can get to 10psi like it should. meaning theres no major boost leaks.

 

Could be bypass valve or maybe the belt slipping.
You can tie-wrap the valve closed and drive to see if you still get the same boost changes. If so points to something other than the valve.

 

My Autometer boost gauge did the same thing with it tapped into the FPR line. What it is, is the gauges are really sensitive and it picks up the pulses of air out of the S/C rather than a constant pressure. The M45 S/C isnt verry efficent in the way it works and you willl always get theese pulses.
You can "fix" the gauge by changing your boost gauge line to a rubber hose, and tap it in to the I/C outlet horn. Its quite a bit of work to do this but if it bugs you that much...

 

when that started happening i feel like a blow off valve type sound when i let off the gas when im on boost. think it relates?

 

How many miles on the sc?
They do loose efficency as they wear...they simply get looser as the rotors wear.
You can ziptie the bypass valve closed as a test to see if it is not shutting...
And never underestimate the chance of a slipping belt....

 

the s/c has 69k miles. it gets to full boost but only at almost redline. around 3-5k rpm's it only gets to 5 or 6 psi. and its doing horrible gas mileage in city.