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Update
I wrote a letter to BMW corporate stating my case. Everything was handled through an escalation supervisor. BMW USA corporate came back with an offer to cover the parts to replace the engine. Since this was the bulk of the cost, I am more than happy with their token of good will.
Currently, the car is at the dealer being repaired. Labor costs were estimated to be around $4k. We shall see. The service manager hopes to get me the car back within the week.
A new motor and 2-year warranty: I am more than okay with that.
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