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I don't think anyone here has dealt with replacing a xenon headlamp.........those are supposed to be only done by service techs. It's not like a halogen bulb where you can just remove and replace it. In addition, xenon lamps have a long life, and few, if any 2004 X3s have seen the need for headlamp replacement already.
As for the height alignment, do both headlamps auto-level properly when you turn the car on the first time? The headlamp height adjustment is not meant for large adjustments. I notice a difference in the light cutoff with 1,5 to 2 turns.
It sounds like you do need a trip to the dealer.
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