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I am going through a similar issue with my car right now (different brand, different cause, but same BS from the dealer)... i took the same route as you, got it fixed at my own expense... but as soon as i get the invoice for the work, i will sue the dealer because i have PROOF that they are responsible.
in your case (please someone corrects me if i am wrong), they voided your warranty because they determined you have "tuned" your ECU (btw, did you or not?). however, based on what you said, and what a few people here have said, the damage most likely comes from an unbalanced crankshaft, and what not = mechanical imperfections present from the start, rather then electronic fuck-ups... shouldnt this be enough to have a case to demonstrate that the ECU has nothing to do with that and that BMW is fully responsible for the damages???
either way, ifeel your pain...
Pat
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