Thought that I might contribute here...my car was just diagnosed with a defective USB hub. Although my iPod was connected, the iDrive just said "not connected" next to the little USB symbol on the display. I had the tech take a look while he was updating my maps, and the diagnostic test that he ran proved that it was in fact defective. he said he's seen 6 others like that in the last couple months.
i know that my problem isn't exactly like what you are describing, but i wonder if there is a bigger issue at hand...